CREDIT AGREEMENT



                           DATED AS OF MARCH 19, 1999



                                      AMONG



                             ARGUSS HOLDINGS, INC.,


                            THE LENDERS NAMED HEREIN


                                       AND

                           NATIONSBANK, N.A., AS AGENT

                                       AND

                     NATIONSBANC MONTGOMERY SECURITIES LLC,

                        AS SYNDICATION AGENT AND ARRANGER


<PAGE>


                                CREDIT AGREEMENT

         THIS CREDIT AGREEMENT is made as of March 19, 1999, by and among ARGUSS
HOLDINGS,  INC.  (the  "Borrower"),  a Delaware  corporation  with its principal
office at One Church Street,  Suite 302, Rockville,  Maryland 20850, each of the
lenders named herein on the  signature  pages hereof (such lenders and any other
lender or lenders which may hereafter become a party to this Agreement  pursuant
to the  provisions  of Section 11.3 hereof,  together,  the  "Lenders"  and each
individually a "Lender") NATIONSBANK,  N.A., a national banking association,  as
agent  for  the  Lenders  (in  such  capacity,  the  "Agent"),  and  NATIONSBANC
MONTGOMERY SECURITIES LLC ("NMS"), as the syndication agent and arranger.

         The Borrower, the Lenders, the Agent and NMS agree as follows:

                                    ARTICLE 1
                          DEFINITIONS; ACCOUNTING TERMS
                          -----------------------------

         Section 1.1  DEFINITIONS. As used in this Agreement the following terms
shall have the  meanings  herein  specified  and shall  include in the  singular
number the plural and in the plural number the singular:

         "Acquisition"   means  any  transaction,   or  any  series  of  related
transactions,  consummated  (after  the date of this  Agreement),  by which  the
Borrower or any of its  Subsidiaries (a) acquires a division or similar business
unit,  any  ongoing  business or all or  substantially  all of the assets of any
Person  incorporated or organized  within the United States of America,  whether
through the purchase of assets, merger or otherwise,  (b) directly or indirectly
acquires  control of at least a majority (in number of votes) of the  securities
of a corporation which have ordinary voting power for the election of directors,
or (c) directly or indirectly  acquires control of a majority ownership interest
in any Person that is not a  corporation.  The terms  "Acquire",  "Acquired" and
"Acquiring" used as verbs shall have correlative meanings.

         "Acquisition  Agreement" means (i) the agreement between an Acquisition
Company  and a Target or the seller or sellers  of a Target,  pursuant  to which
such  Acquisition  Company agrees to Acquire a division or similar business unit
from a Target, all or substantially all of the assets,  stock or other ownership
interests of a Target, or merge with a Target;  (ii) the documents  described in
any such agreement and related in any manner to the  Acquisition of any Acquired
assets,  including,  but not  limited  to, the  buy/sell  agreement,  historical
financial  statements of the Target and a detailed  description  of the Acquired
assets,  and  every  other  document,  instrument  or  certificate  executed  in
connection with such agreement; together with (iii) all amendments to any of the
foregoing.

         "Acquisition Analysis" means, with respect to any proposed Acquisition,
an analysis,  prepared by the chief  financial  officer of the Borrower,  of the
structure and financial impact of the Acquisition in question,  including, where
the Permitted Acquisition Price is equal to or greater than Five Million Dollars
($5,000,000),  the Target's audited financial statements (or where the Permitted
Acquisition  Price  is  less  than  $5,000,000   management  prepared  financial


<PAGE>

statements  acceptable to the Agent in its sole  discretion) for the last fiscal
year and a summary of the material tax and  accounting  consequences  related to
the  Acquisition,  which  analysis  shall  be in form and  substance  reasonably
satisfactory to the Agent.

         "Acquisition Company" means the Borrower or any Consolidated Subsidiary
of the Borrower Acquiring a Target.

         "Adjusted  Eurodollar  Rate"  means,  for any  Eurodollar  Loan for any
Interest Period therefor, the rate per annum (rounded upwards, if necessary,  to
the nearest  1/100 of 1%)  determined  by the Agent to be equal to the  quotient
obtained by dividing (a) the Eurodollar  Rate for such  Eurodollar Loan for such
Interest Period by (b) l minus the Reserve  Requirement for such Eurodollar Loan
for such Interest Period.

         "Affiliate" means, as to any Person, each other Person that directly or
indirectly  (through  one or more  intermediaries  or  otherwise)  controls,  is
controlled by, or is under common control with, such Person.

         "Agent" has the meaning set forth on the first page hereof.

         "Agent's  Account"  means the account  maintained  by the Agent at 6610
Rockledge Drive, Bethesda,  Maryland 20817 for the purposes of this Agreement or
such other  account as may be  specified by the Agent to the Borrower and to the
Lenders.

         "Agent's Fee" means the fees payable to the Agent under the  provisions
of Section 2.9(b).

         "Aggregate  Commitments"  means  the  sum  of the  Aggregate  Revolving
Commitments, and the Aggregate Term Commitments.

         "Aggregate  Revolving  Commitments"  means  the  sum of  the  Revolving
Commitments  [which,  as of the Closing Date,  is a principal  amount of Seventy
Million Dollars ($70,000,000)],  as such amount may be reduced from time to time
pursuant to Sections 2.7 and 2.13.

         "Aggregate  Term  Commitments"  means the sum of the Term  Commitments,
which is, Thirty Million Dollars ($30,000,000).

         "Agreement"  means this Credit  Agreement,  as it may be extended  from
time to time and as it may be amended from time to time by written agreement, in
each case as herein provided.

         "Applicable Lending Office" means, for each Lender and for each Type of
Loan,  the  "Lending  Office" of such Lender (or of an Affiliate of such Lender)
designated  for such Type of Loan on the  signature  pages  hereof or such other
office of such Lender (or an  Affiliate  of such Lender) as such Lender may from
time to time  specify  to the  Agent  and the  Borrower  by  written  notice  in
accordance  with the terms  hereof as the office by which its Loans of such Type
are to be made and maintained.



                                       2
<PAGE>

         "Applicable  Margin" means,  for any day, with respect to any Loan, the
applicable  rate per annum set forth below under the caption  "Base Rate Margin"
or "Eurodollar Rate Margin," based upon the applicable Leverage Ratio:

              --------------------- ----------------- ---------------
                                    Base Rate         Eurodollar
              Leverage Ratio        Margin            Rate Margin
                                    (basis points     (basis  points
                                    per annum)        per annum)
              --------------------- ----------------- ---------------

              Less than or
              equal to 1.0:1.0      0.0               125.0

              --------------------- ----------------- ---------------

              Greater than
              1.0:1.0
              but less than or      25.0              150.0
              equal to 1.5:1.0

              --------------------- ----------------- ---------------

              Greater than
              1.5:1.0 but less      50.0              175.0
              than or equal to
              2.0:1.0

              --------------------- ----------------- ---------------

              Greater than          100.0             225.0
              2.0:1.0
              --------------------- ----------------- ---------------

For  purposes  of the  foregoing,  the  Applicable  Margin for any date shall be
determined  by reference to the Leverage  Ratio as of the last day of the fiscal
quarter of the Borrower most recently ended as of such  determination date (such
calculation of the Leverage Ratio to be for the four fiscal  quarters  ending on
such date), and any change in the Applicable  Margin shall become effective five
(5) Business  Days after the date on which each Lender  receives  the  financial
statements  required to be delivered  pursuant to Sections  6.1(a) or (b) as the
case may be, and shall apply to Loans  outstanding on such delivery date or made
on and after such delivery date.  Notwithstanding  the foregoing,  (i) until the
Borrower has delivered to the Agent the  Borrower's  fiscal year 1998  financial
information  in form and content  required by Section 6.1,  the  Leverage  Ratio
shall be deemed,  solely for the purposes of calculating the Applicable  Margin,
to be the greater of (A) greater than 1.5:1.0 but less than or equal to 2.0:1.0,
and (B) the Applicable Margin which would be otherwise  applicable;  and (ii) at
any other time during  which the Borrower has failed to deliver to the Agent any
financial  statement  required by Section 6.1 within the time provided  therein,
the Leverage Ratio shall be deemed,  solely for the purposes of calculating  the
Applicable  Margin,  to be greater than 2.0:1.0  until such time as the Borrower
shall have delivered all financials required by Section 6.1 and such certificate
to the Agent.

         "Assets" means, at any time, all assets that should, in accordance with
GAAP  consistently  applied,  be classified as assets on a consolidated  balance
sheet of a Person.



                                       3
<PAGE>

         "Assignment and Acceptance" means an assignment and acceptance  entered
into by a Lender and an  assignee,  and  accepted  by the Agent,  in the form of
EXHIBIT H.

         "Authorized  Officer" means, with respect to any act to be performed or
duty to be discharged by any Person which is not an  individual,  any officer or
other  representative  thereof then  authorized to perform such act or discharge
such duty.

         "Base Rate" means,  for any day, the rate per annum equal to the higher
of (a) the Federal  Funds Rate for such day plus one-half of one percent (1/2 of
1%) and (b) the Prime  Rate for such day.  Any  change in the Base Rate due to a
change in the Prime Rate or the  Federal  Funds Rate shall be  effective  on the
effective date of such change in the Prime Rate or Federal Funds Rate.

         "Base Rate Loan" means a Revolving  Loan which bears  interest at rates
based upon the Base Rate, or the Term Loan at such time as it bears  interest at
a rate based upon the Base Rate; and "Base Rate Loans" means all of said Loans.

         "Borrower" has the meaning set forth on the first page hereof.

         "Business Day" means any day,  other than a Saturday,  Sunday or public
holiday or the equivalent,  on which  commercial banks in New York, New York and
Charlotte,  North  Carolina,  are open for the transaction of business and, with
respect to Eurodollar  Loans, a day of the year on which dealings are carried on
in the London  interbank  market and  commercial  banks are open for business in
London  and not  required  or  authorized  to  close  in New  York,  New York or
Charlotte, North Carolina.

          "Capitalized   Lease  Obligations"  means  the  amount  determined  in
accordance  with GAAP which  represents the  capitalized  value of leases of the
Borrower and its Consolidated Subsidiaries which appears on the liabilities side
of the consolidated balance sheet of the Borrower and its Subsidiaries.

         "Change in Control" means (a) the  acquisition of ownership,  directly,
or  indirectly,  beneficially  or of record,  by any Person or group (within the
meaning of the  Securities  Exchange Act of 1934 and the rules of the Securities
and Exchange  Commission  thereunder as in effect on the date hereof), of shares
representing  more than  thirty five  percent  (35%) of the  aggregate  ordinary
voting power  represented  by the issued and  outstanding  capital  stock of the
Borrower;  (b) the  occupation  of a majority  of the seats  (other  than vacant
seats) on the board of directors of the Borrower by individuals who were neither
(i)  nominated by the board of  directors of the Borrower nor (ii)  appointed by
directors so nominated;  or (c) the acquisition of direct or indirect Control of
the Borrower by any Person or group.

         "Closing Date" means the date on which this Agreement has been executed
by all the  parties  hereto and all of the  conditions  set forth in Section 5.1
have been satisfied.

         "Code" means the Internal Revenue Code of 1986, as amended from time to
time,  and any  successor  statute,  including  (unless  the  context  otherwise


                                       4
<PAGE>

requires) any rules or regulations  promulgated  thereunder,  in each case as in
effect from time to time.  References to sections of the Code shall be construed
to also refer to any successor sections.

         "Collateral"  means all of the  property  which is  subject or is to be
subject to the Liens granted by the Collateral Documents.

         "Collateral  Documents"  means  the  Security  Agreements,  the  Pledge
Agreements,   the  Intellectual  Property  Assignments,   and  all  supplemental
assignments,  mortgages,  deeds of trust and other  documents  now or  hereafter
delivered or to be delivered pursuant thereto.

         "Commitment"  means  each  Lender's   individual   obligation  to  make
Revolving Loans and the Term Loan in a principal amount not to exceed the dollar
amounts  shown on the signature  pages  opposite its name, as such amount may be
reduced from time to time pursuant to Sections 2.7, 2.13 and 11.3(a).

         "Commitment  Fee on the  Unused  Portion  of the  Loan"  means  the fee
payable under Section 2.9(a).

         "Commitment Fee on Unused Portion of Loan Rate" means, for any day, the
applicable  rate per annum set forth  below based upon the  applicable  Leverage
Ratio:


              --------------------------- ---------------------------

              Leverage Ratio              Commitment Fee on Unused
                                          Portion of Loan Rate
                                          (basis points per annum)

              --------------------------- ---------------------------

              Less than or                25.0
              equal to 1.0:1.0

              --------------------------- ---------------------------

              Greater than 1.0:1.0
              but less than or            30.0
              equal to 1.5:1.0

              --------------------------- ---------------------------

              Greater than 1.5:1.0 but
              less than or equal to       37.5
              2.0:1.0

              --------------------------- ---------------------------

              Greater than 2.0:1.0        50.0

              --------------------------- ---------------------------

For purposes of the foregoing,  the Commitment Fee on the Unused Portion of Loan
Rate for any date shall be determined  by reference to the Leverage  Ratio as of



                                       5
<PAGE>

the last day of the fiscal  quarter of the Borrower  most  recently  ended as of
such  determination  date (such  calculation of the Leverage Ratio to be for the
four fiscal quarters ending on such date),  and any change in the Commitment Fee
on the Unused  Portion of Loan shall become  effective  five (5)  Business  Days
after the date on which the Agent receives the financial  statements required to
be  delivered  pursuant  to  Sections  6.1(a)  and  (b),  as the  case  may  be.
Notwithstanding the foregoing, (i) until the Borrower has delivered to the Agent
the  Borrower's  fiscal  year 1998  financial  information  in form and  content
required by Section  6.1,  the  Leverage  Ratio shall be deemed,  solely for the
purposes of  calculating  the  Commitment  Fee on the Unused Portion of the Loan
Rate,  to be the greater of (A) greater  than  1.5:1.0 but less than or equal to
2.0:1.0, and (B) the Applicable Margin which would be otherwise applicable;  and
(ii) at any other time during  which the  Borrower  has failed to deliver to the
Agent any financial  statement  required by Section 6.1 within the time provided
therein, the Leverage Ratio shall be deemed, for the purposes of calculating the
Commitment  Fee on the  Unused  Portion of the Loan  Rate,  to be  greater  than
2.0:1.0  until such time as the  Borrower  shall have  delivered  all  financial
statements required by Section 6.1 and such certificate to the Agent.

         "Conceptronic" means Conceptronic, Inc., a Delaware corporation.

         "Conceptronic  Disposition"  means the  Disposition  by the Borrower of
Conceptronic, in accordance with Section 2.14.

         "Consolidated  Subsidiary"  means a Subsidiary  of the  Borrower  whose
financial  condition  and results of operations  are included on a  consolidated
basis in a  consolidated  balance sheet and  consolidated  statements of income,
changes  in  shareholders'  equity  and  cash  flows  of the  Borrower  and  its
Subsidiaries prepared in accordance with GAAP.

         "Continue",  "Continuing",  "Continuation", and "Continued" shall refer
to the  continuation  pursuant to Section 2.4 hereof of a  Eurodollar  Loan of a
Eurodollar Loan from one Interest Period to the next Interest Period.

         "Control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the  ability to  exercise  voting  powers,  by  contract  or  otherwise.
"Controlling" and Controlled" have meanings correlative thereto.

         "Convert", "Converting,  "Conversion", and "Converted" shall refer to a
conversion pursuant to Section 2.4 or Article 3 of one Type of Loan into another
Type of Loan.


         "Current  Maturities  of Long Term  Debt"  means,  as of any date,  the
aggregate  amount of principal  payments  (including,  without  limitation,  the
portion of any  obligation  under  Capitalized  Lease  Obligations  allocable to
amortization in accordance with GAAP) in respect of Long-Term Debt which are, in
accordance  with  GAAP,   properly   classified  as  of  such  date  as  current
liabilities,  and the  aggregate  unpaid  principal  amount of  Synthetic  Lease



                                       6
<PAGE>

obligations calculated in accordance with applicable Federal income tax laws and
regulations.

         "Current  Taxes"  means,  for any  period,  Taxes  paid in such  period
(rather than merely accrued or deferred.)

         "Debt" of any Person  means all  obligations,  contingent  or otherwise
which, in accordance with GAAP,  should be classified upon such Person's balance
sheet as  liabilities  or  disclosed  in  footnotes  thereto,  but in any  event
including liabilities secured by any lien existing on property owned or acquired
by such Person or a Subsidiary  thereof  (whether or not the  liability  secured
thereby shall have been assumed) and  obligations  which have been or under GAAP
should be capitalized for financial accounting purposes,  including all Earn Out
Provisions,  and excluding  operating leases, and the aggregate unpaid principal
amount of Synthetic Lease  obligations  calculated in accordance with applicable
Federal income tax laws and regulations.

         "Default"  means any event or condition which with the giving of notice
or passage of time, or both, would constitute an Event of Default.

         "Defaulting  Lender"  means any Lender  with  respect to which a Lender
Default is in effect.

         "Disposition"  shall  mean  any  sale,  assignment,  transfer  or other
disposition of  substantially  all of the Assets (whether now owned or hereafter
acquired) or substantially  all of the stock of any Subsidiary,  by the Borrower
or any of its Subsidiaries to any other Person,  excluding any sale, assignment,
transfer or other  disposition of any assets sold or disposed of in the ordinary
course of business  and on ordinary  business  terms.  The terms  "Dispose"  and
"Disposed" shall have correlative meanings.

         "Distribution"  by any  Person  means (a) the  retirement,  redemption,
purchase,  or other  acquisition  for value of any capital stock or other equity
securities or partnership  interests issued by such Person,  (b) the declaration
or  payment  of any  dividend  or  distribution  on or with  respect to any such
securities or partnership interests,  (c) any loan or advance by such Person to,
or other  investment by such Person in, the holder of any of such  securities or
partnership  interests,  (d) any other payment (other than salaries of employees
or advances made in the ordinary  course of business to employees for travel and
other expenses  incurred in the ordinary course of business) by such Person with
respect to such securities or partnership  interests,  and (e) the prepayment of
any Debt other than as allowed under Section 2.10.

         "Dollars"  and the sign "$" means lawful money of the United  States of
America.

         "Domestic  Subsidiary"  means a  Subsidiary  incorporated  or organized
within the United States of America.

         "Earn Out  Provisions"  means  those  payment  obligations  incurred in
connection  with  Permitted  Acquisitions  which are  calculated  based upon the
future performance of the Target.

         "Eastern Time" means Eastern  Standard Time or Eastern Daylight Savings



                                       7
<PAGE>

Time,  whichever shall be in effect in Charlotte,  North Carolina on the date of
determination.

         "EBITDA"  means  for any  period,  the sum  for  the  Borrower  and its
Subsidiaries   (determined  on  a  consolidated  basis  without  duplication  in
accordance  with  GAAP) of (a) Net  Income  for  such  period,  PLUS (b)  Taxes,
Interest Expense, depreciation,  amortization and other non-cash charges (to the
extent  deducted to determine Net Income) for such period;  PROVIDED that (1) if
the Borrower or any of its  Subsidiaries  shall have  Disposed of a business (or
any part  thereof)  during  such  period,  EBITDA  shall be  computed as if such
business (or part  thereof) had been  Disposed of prior to the first day of such
period, and (2) if the Borrower or any of its Subsidiaries shall have Acquired a
business  (or any part  thereof)  during such  period,  and if the  Borrower has
provided the Agent with financial statements  acceptable to the Agent or audited
financial  statements  (prepared in accordance  with GAAP by an accounting  firm
acceptable  to  the  Agent)  of  such  business,  or  (if  such  statements  are
unavailable)  other due diligence as to the financial  position of such business
acceptable  to the  Agent,  for  that  portion  of  such  period  preceding  the
Acquisition,  EBITDA shall be computed as if such business (or part thereof) had
been owned by the  Borrower  or such  Subsidiary  for the whole of such  period.
EBITDA may be increased by the amount of projected reductions in compensation of
executive  officers of a Target which are substantiated by employment  contracts
or other documentation  acceptable to the Agent. If a Target has been generating
a negative  EBITDA for the prior twelve (12) month period,  the adjusted  amount
shall be deducted for purposes of calculating compliance with Section 6.10.

         "Eligible  Assignee" means (i) a Lender; (ii) an Affiliate of a Lender;
and (iii) any other  Person  approved  by the Agent and,  unless a Default or an
Event of Default has occurred and is  continuing  at the time any  assignment is
effected in accordance with Section 11.3, the Borrower,  such approval not to be
unreasonably  withheld or delayed by the Borrower and such approval to be deemed
given by the Borrower if no objection  is received by the  assigning  Lender and
the Agent from the Borrower  within two (2)  Business  Days after notice of such
proposed  assignment has been provided by the assigning  Lender to the Borrower;
PROVIDED,  HOWEVER,  that  neither the Borrower nor an Affiliate of the Borrower
shall qualify as an Eligible Assignee.

         "Employee Plan" means an employee benefit plan or other plan covered by
Title IV of ERISA  and  maintained  in  whole  or in part for  employees  of the
Borrower  or any of its  Subsidiaries,  including  any  such  plan  of an  ERISA
Affiliate.


         "Environmental  Laws"  means  any and all  Federal,  state,  local  and
foreign laws which provide remedies,  including  injunctive relief, for injuries
to persons or damage to or contamination of property  resulting from the release
or threatened  release of Hazardous  Material or which regulate the  generation,
storage,  transportation  or  disposal  of  Hazardous  Material  in  any  manner
applicable to the Borrower or any of its Subsidiaries or any of their respective
properties,  including,  without  limitation,  the  Comprehensive  Environmental
Response,  Compensation, and Liability Act (42 U.S.C. Section 9601 et seq.), the
Hazardous  Material  Transportation  Act (49 U.S.C.  Section 1801 et seq.),  the
Solid Waste  Disposal Act (42 U.S.C.  Section 6901 et seq.),  the Federal  Water



                                       8
<PAGE>

Pollution  Control Act (33 U.S.C.  Section 1251 et seq.),  the Clean Air Act (42
U.S.C.  Section  7401 et seq.),  the Toxic  Substances  Control  Act (15  U.S.C.
Section 2601 et seq.), the Occupational Safety and Health Act (29 U.S.C. Section
651 et seq.) and the  Emergency  Planning and  Community  Right-to-Know  Act (42
U.S.C.  Section 11001 et seq.),  each as amended or supplemented,  together with
any rules and regulations promulgated thereunder,  each as in effect on the date
of determination.

         "Equity Issuance" means any issuance or sale by a Person of its capital
stock or other similar  equity  security,  or any  warrants,  options or similar
rights to acquire,  or securities  convertible  into or  exchangeable  for, such
capital stock or other similar equity security.

         "ERISA"  means the  Employee  Retirement  Income  Security Act of 1974,
together with the rules and  regulations  promulgated  thereunder,  as in effect
from time to time.

         "ERISA  Affiliate"  means  any  Person  which is a  member  of the same
"controlled  group of  corporations" as the Borrower or any Person under "common
control" with the Borrower within the meaning of Section 414 of the Code.

         "Eurodollar  Loan" means a Revolving Loan which bears interest at rates
based upon the  Adjusted  Eurodollar  Rate,  or the Term Loan at such time as it
bears  interest  at  a  rate  based  upon  the  Adjusted  Eurodollar  Rate;  and
"Eurodollar Loans" means all of said Loans.

         "Eurodollar  Rate"  means,  for any  Eurodollar  Loan for any  Interest
Period  therefor,  the rate per annum  (rounded  upwards,  if necessary,  to the
nearest 1/100 of 1%) appearing on Telerate Page 3750 (or any successor  page) as
the London interbank offered rate for deposits in Dollars at approximately 11:00
a.m.  (London  time) two Business  Days prior to the first day of such  Interest
Period for a term  comparable  to such Interest  Period.  If for any reason such
rate is not available, the term "Eurodollar Rate" shall mean, for any Eurodollar
Loan for any Interest Period therefor,  the rate per annum (rounded  upward,  if
necessary,  to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as
the London interbank offered rate for deposits in Dollars at approximately 11:00
a.m.  (London  time) two Business  Days prior to the first day of such  Interest
Period for a term comparable to such Interest Period; provided, HOWEVER, if more
than one rate is  specified on Reuters  Screen LIBO Page,  the  applicable  rate
shall be the arithmetic mean of all such rates (rounded  upwards,  if necessary,
to the nearest 1/100 of 1%).

         "Event of Default" has the meaning set forth in Article 8.

         "Federal Funds Rate" means,  for any day, the simple  interest rate per
annum (rounded upwards, if necessary, to the nearest 1/100th of 1%) equal to the
weighted  average of the rates on  overnight  federal  funds  transactions  with
members of the Federal  Reserve System arranged by federal funds brokers on such
day, as  published  by the Federal  Reserve Bank of New York on the Business Day
next succeeding  such day,  PROVIDED that (a) if such day is not a Business Day,
the Federal Funds Rate for such day shall be such rate on such  transactions  on
the next preceding Business Day, and (b) if no such rate is so published on such
next  succeeding  Business Day, the Federal Funds Rate for such day shall be the
average  rate charged to the Agent (in its  individual  capacity) on such day on
such transactions as determined by the Agent.



                                       9
<PAGE>

         "Fixed  Charge  Coverage  Ratio" means,  at any time,  the ratio of (a)
EBITDA, minus Current Taxes, of the Borrower and its Consolidated  Subsidiaries,
to (b) Current  Maturities  of Long-Term  Debt,  plus Interest  Expense,  of the
Borrower and its Consolidated Subsidiaries.

         "Foreign  Subsidiary"  means a  Subsidiary  which was  incorporated  or
organized  in  jurisdictions  other than a state  within  the  United  States of
America.

         "Funded Debt" means at any date, with respect to any Person, all senior
debt,  letters of credit,  all cash payments due under any Earn Out  Provisions,
stockholder debt,  subordinated  debt,  seller notes,  guaranties and contingent
Debt and Capitalized Lease Obligations at such date.

         "GAAP" means  generally  accepted  accounting  principles in the United
States of America.

         "Governmental  Authority" means the United States of America, any state
or other  political  subdivision  thereof  and any  court,  agency,  department,
commission, board, bureau or instrumentality of any of the foregoing.

         "Guarantor"  means  Arguss   Communications  Group,  Inc.,  a  Delaware
corporation,  Arguss Services Corp., a Delaware  corporation,  Conceptronic  and
each current and future  Subsidiary  and the  successors  and assigns of each of
them, in its capacity as guarantor of the payment of the Loans, and "Guarantors"
means all of said Persons

         "Guaranty"  means each  guaranty of the Loans  executed by a Guarantor,
and "Guaranties" means all of said guaranties.

         "Hazardous  Material" means (a) any oil, petroleum or petroleum derived
substance, any drilling fluids, produced waters and other wastes associated with
the  exploration,   development  or  production  of  crude  oil,  any  flammable
substances or explosives,  any radioactive  materials,  any hazardous  wastes or
substances, any toxic wastes or substances, or any other materials or pollutants
which  (i)  pose  a  hazard  to  any  property  of  the  Borrower  or any of its
Subsidiaries or to Persons on or about such property or (ii) cause such property
to be in violation of any Environmental  Laws; (b) asbestos in any form which is
or could become friable, urea formaldehyde foam insulation, electrical equipment
which contains any oil or dielectric fluid containing levels of  polychlorinated
biphenyls in excess of fifty parts per million;  (c) any  chemical,  material or
substance  defined as or included in the  definition of "hazardous  substances,"
"hazardous  wastes,"  "hazardous   materials,"   "extremely   hazardous  waste,"
"restricted  hazardous waste," or "toxic  substances" or words of similar import
under any  applicable  law; and (d) any other  chemical,  material or substance,
exposure  to which is  prohibited,  limited  or  regulated  by any  Governmental
Authority  having  jurisdiction  over the Borrower or any of its Subsidiaries or
any of their respective properties.

         "Indemnified Party" has the meaning set forth in Section 10.6 hereof.

         "Intellectual Property Assignment" means any security agreement between



                                       10
<PAGE>

the Borrower or a Guarantor and the Agent,  substantially in the form of EXHIBIT
I hereto,  as such agreement may be amended,  supplemented or modified from time
to time, and "Intellectual Property Assignments" means all of said agreements.

         "Interest  Expense" means, for any period, the sum for the Borrower and
its Consolidated  Subsidiaries  (in accordance with GAAP) of the following:  (a)
all  interest  in respect  of Debt  (including  the  interest  component  of any
payments in respect of  Capitalized  Lease  Obligations)  accrued or capitalized
during  such  period  PLUS (b) the net amount  payable  (or minus the net amount
receivable) under interest rate protection agreements during such period.

         "Interest  Payment  Date" means (a) as to any Base Rate Loan,  the last
day of each calendar quarter, and (b) as to any Eurodollar Loan, the last day of
the  applicable  Interest  Period for such Loan and, if such Interest  Period is
longer  than three (3) months,  each day prior to the last day of such  Interest
Period that occurs at intervals of three months  duration after the first day of
such Interest Period.

         "Interest  Period"  means,  as  to  any  Eurodollar  Loan,  the  period
commencing  on the date of such  Eurodollar  Loan and ending on the  numerically
corresponding  day (or, if there is no numerically  corresponding  day, the last
day) in the calendar month that is one, two, three or six months thereafter,  as
the Borrower may elect;  PROVIDED,  HOWEVER,  that no Interest  Period shall end
after the Revolving  Commitment  Termination  Date, in the case of the Revolving
Loans,  or the Maturity Date, in the case of the Term Loan;  PROVIDED,  FURTHER,
that whenever the last day of any Interest Period would otherwise occur on a day
other  than a  Business  Day,  the last  day of such  Interest  Period  shall be
extended to occur on the next  succeeding  Business Day,  unless such  extension
would cause the last day of such Interest  Period to occur in the next following
calendar  month,  in which case the last day of such Interest Period shall occur
on the next preceding Business Day.

         "Issuing Bank" means NationsBank,  in its capacity as issuer of Letters
of Credit hereunder,  and its successors in such capacity as provided in Section
2.11(n).


         "LC Fee Rate"  means,  for any day, the  applicable  rate per annum set
forth below,  based upon the  Applicable  Leverage Ratio of the Borrower and its
Consolidated Subsidiaries:



                                       11
<PAGE>

              ----------------------------------- -------------------------

                                                  LC Fee
              Leverage Ratio                      (basis points
                                                  per annum)

              ----------------------------------- -------------------------

              Less than or                        125.0
              equal to 1.0:1.0

              ----------------------------------- -------------------------

              Greater than 1.0:1.0
              but less than or                    150.0
              equal to 1.5:1.0

              ----------------------------------- -------------------------

              Greater than 1.5:1.0 but less
              than or equal to 2.0:1.0            175.0

              ----------------------------------- -------------------------

              Greater than 2.0:1.0                225.0

              ----------------------------------- -------------------------

For purposes of the foregoing,  the LC Fee Rate for any date shall be determined
by reference to the Leverage  Ratio as of the last day of the fiscal  quarter of
the Borrower most recently ended as of such determination date (such calculation
of the Leverage Ratio to be for the four fiscal  quarters  ending on such date),
and any change in the LC Fee Rate shall  become  effective  upon the delivery to
each Lender of the  certificate  with respect to the financial  statements to be
delivered  pursuant  to Section  6.1 for the fiscal  quarter or fiscal year most
recently  ended,  as the case may be,  and  shall  apply to  Letters  of  Credit
outstanding  on such delivery  date or issued on and after such  delivery  date.
Notwithstanding the foregoing, (i) until the Borrower has delivered to the Agent
the  Borrower's  fiscal  year 1998  financial  information  in form and  content
required by Section 6.1, the LC Fee Rate shall be deemed, solely for purposes of
calculating  the LC Fee Rate,  to be the greater of (A) greater than 1.5:1.0 but
less than or equal to 2.0:1.0,  and (B) the LC Fee Rate which would be otherwise
applicable;  and (ii) at any other time during  which the Borrower has failed to
deliver to the Agent any financial  statement required by Section 6.1 within the
time provided therein,  the Leverage Ratio shall be deemed,  for the purposes of
calculating  the LC Fee Rate,  to be greater than 2.0:1.0 until such time as the
Borrower shall have delivered all financial  statements  required by Section 6.1
and such certificate to the Agent.

         "LC Subfacility" has the meaning set forth in Section 2.11(b).

         "Lender"  and  "Lenders"  have the meanings set forth on the first page
hereof,  PROVIDED that any lender which  becomes a party hereto  pursuant to the
provisions of Section 11.3(a) or Section 3.7 shall thereafter be included in the
definition of "Lenders".

         "Lender  Default" means (i) the failure (which has not been  rectified)
of a Lender to make  available  its portion of any borrowing or Letter of Credit
participation  or (ii) a Lender  having  notified  the Agent and/or the Borrower
that it does not intend to comply with its obligations  hereunder as a result of



                                       12
<PAGE>

the appointment of a receiver or conservator  with respect to such Lender at the
direction or request of any regulatory agency or authority.

         "Letter  of  Credit"  means any  letter of credit  issued  pursuant  to
Section 2.11 of this Agreement.

         "Letter of Credit Fees" means the fees payable under Section 2.9(c).

         "Letter of Credit  Participant"  has the  meaning  set forth in Section
2.11(h).

         "Letter  of  Credit  Request"  has the  meaning  set  forth in  Section
2.11(c).

         "Leverage  Ratio" means,  at any time,  the ratio of (a) Funded Debt of
the Borrower and its  Consolidated  Subsidiaries,  to (b) EBITDA of the Borrower
and its Consolidated Subsidiaries.

         "Lien" means any mortgage,  deed of trust,  deed to secure debt, grant,
pledge, security interest, assignment,  encumbrance, judgment, lien or charge of
any kind, whether perfected or unperfected, avoidable or unavoidable, including,
without limitation, any conditional sale or other title retention agreement, any
lease  in the  nature  thereof,  and the  filing  of or  agreement  to give  any
financing  statement  under the  Uniform  Commercial  Code of any  jurisdiction,
excluding the precautionary filing of any financing statement by any lessor in a
true lease transaction,  by any bailor in a true bailment  transaction or by any
consignor in a true consignment transaction under the Uniform Commercial Code of
any jurisdiction or the agreement to give any financing  statement by any lessee
in a true lease transaction,  by any bailee in a true bailment transaction or by
any consignee in a true consignment transaction.

         "Loan" means the Term Loan, a Revolving  Loan, or a Swing Line Loan, as
the case may be, and "Loans" means the Term Loan, all Revolving  Loans and Swing
Line Loans, collectively.

         "Loan  Documents"  means  this  Agreement,  the Notes,  the  Collateral
Documents,  the  Guaranties  and  any  and  all  other  documents,  instruments,
certificates and agreements  executed and/or  delivered by the Borrower,  any of
its  Subsidiaries  or any other  Person in  connection  herewith or therewith or
relating to the Loans, or any one, more or all of the foregoing,  as the context
shall require, as amended, modified, supplemented, renewed or extended from time
to time and any replacement thereof or substitution therefor.

         "Loan Parties" means the Borrower and the Guarantors.


         "Long-Term  Debt"  means  as of any  date,  that  portion  Funded  Debt
scheduled  to  mature  more  than  one (1) year  from  such  date  and  which is
classified properly as long-term debt in accordance with GAAP.

         "Margin Stock" has the meaning assigned to such term in Regulation U.



                                       13
<PAGE>

         "Material  Contract" means any contract to which the Borrower or any of
its Subsidiaries is a party involving aggregate  consideration  payable to or by
such Person of Two Million Dollars ($2,000,000) or more in any year or otherwise
material  to the  business,  condition  (financial  or  otherwise),  operations,
performance, properties or prospects of the Borrower and its Subsidiaries, taken
as a whole; and "Material Contracts" means all of said contracts.

         "Materially  Adverse Effect" means (a) a material adverse effect on the
business,  prospects,  operations  or condition  (financial or otherwise) of the
Borrower and its  Subsidiaries on a consolidated  basis,  (b) a material adverse
effect on the ability of the  Borrower or any other  Person to perform or comply
with any of the terms or conditions of any Loan Document to which it is a party,
(c) a material  adverse  effect on the  Collateral,  taken as a whole,  or (d) a
material   adverse   effect  on  the   legality,   validity,   binding   effect,
enforceability  or  admissibility  into  evidence  of any Loan  Document  or the
ability of any Lender to enforce any rights or remedies  under or in  connection
with any Loan Document.

         "Maturity  Date"  means the earlier to occur of (i) five (5) years from
the  Closing  Date and (ii) the date the Term Loan is paid in full  (whether  by
prepayment, accelerated payment, or otherwise).

         "Minimum   Compliance   Level"   means  Fifty  Five   Million   Dollars
($55,000,000), adjusted upward, effective as of December 31, 1998, and as of the
end of each  fiscal  quarter  thereafter,  by an amount  equal to the sum of (i)
seventy five percent  (75%) of the  consolidated  Net Income of the Borrower and
its Subsidiaries for such fiscal quarter,  with each of the foregoing  increases
being  fully  cumulative,  and with no  reduction  being  made on account of any
negative  consolidated  Net Income of the Borrower and its  Subsidiaries for any
fiscal quarter,  PLUS (ii) one hundred percent (100%) of the aggregate amount of
all cash and other  consideration  received by the Borrower or any Subsidiary in
respect of any  Equity  Issuance  during  such  fiscal  quarter,  and,  FURTHER,
PROVIDED,  that  from  and  after  the  Conceptronic  Disposition,  the  Minimum
Compliance  Level  shall,  if  the  Conceptronic   Disposition  results  in  the
recognition  of a loss by the  Borrower,  be  reduced by the amount of Net Worth
allocated to Conceptronic as of such date, or, if the  Conceptronic  Disposition
results in the recognition of a gain by the Borrower, increased by the amount of
such gain.

         "NMS" has the meaning set forth on the first page hereof.

         "NationsBank"  means NationsBank,  N.A., a national banking association
and its successors.

         "Net Income" means, for any Person for any period, the consolidated net
income  (or  deficit)  of such  Person  and its  Subsidiaries  for  such  period
determined on a consolidated basis in accordance with GAAP;  provided that there
shall be excluded from the  calculation  thereof any  extraordinary,  unusual or
non-recurring gains or losses during such period in accordance with GAAP.



                                       14
<PAGE>

         "Net Worth" means, at any time, the excess of (a) Assets over (b) Debt.

         "No-Default Certificate" means a certificate of the Principal Financial
Officer of the Borrower,  certifying  that (a) such  individual has no knowledge
that an Event of Default or a Default has occurred and is continuing  and, if an
Event of Default or a Default has occurred and is continuing,  a statement as to
the nature  thereof  and the action  which the  Borrower  proposes  to take with
respect   thereto,   (b)  setting   forth   reasonably   detailed   calculations
demonstrating  compliance  with Section 6.10, and (c) stating whether any change
in GAAP or in the application  thereof has occurred since the date of the latest
audited financial  statements  referred to in Section 4.7 or Section 6.1, as the
case may be,  and,  if any change has  occurred,  specifying  the effect of such
change on the financial statements accompanying such certificate.

         "Non-Defaulting  Lender"  means each  Lender  other  than a  Defaulting
Lender.

         "Non-Excluded Taxes" has the meaning set forth in Section 3.6(a).

         "Note" and "Notes"  means one or more of the  Revolving  Credit  Notes,
Term Notes or Swing Line Note described in Section 2.6 and any other  promissory
notes  issued  pursuant  to this  Agreement,  and any  extensions,  renewals  or
amendments  to,  and  any  replacements  of or  substitutions  for  any  of  the
foregoing.

         "Notice of Borrowing"  means the notice  provided for in Section 2.2(a)
in the form of EXHIBIT B.

         "Notice of  Continuation/Conversion"  means the notice  provided for in
Section 2.4 in the form of EXHIBIT C.

         "Notice of Non-Extension" means the notice provided for in Section 2.13
hereof.

         "Other Taxes" has the meaning set forth in Section 3.6(b).

         "PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.

         "Permitted Acquisitions" has the meaning set forth in Section 2.5.

         "Permitted Acquisition Price" means the purchase price of any Permitted
Acquisition,  including without limitation, the value of any cash consideration,
notes,  assumed Debt (less cash  acquired),  amounts  allocated  to  non-compete
agreements  and the cash portion of the amounts  reasonably  expected to be paid
out under any Earn Out Provisions.

         "Person" means an individual,  corporation,  partnership,  association,
limited liability company,  limited liability partnership,  joint-stock company,
trust, unincorporated organization or joint venture, or a court or government or
any agency or political subdivision thereof.



                                       15
<PAGE>

         "Pledge Agreement" means any pledge agreement executed and delivered by
the  Borrower or a Guarantor  in  accordance  with the  requirements  of Section
2.5(b)(ix) and  substantially in the form of EXHIBIT J hereto, as such agreement
may be  amended,  modified  or  supplemented  from  time to  time,  and  "Pledge
Agreements" means all of said documents.

         "Prime Rate" means the per annum rate of interest established from time
to time by NationsBank as its prime rate,  which rate may not be the lowest rate
of interest charged by NationsBank to its customers.

         "Principal  Financial  Officer"  means  Arthur  F.  Trudel or any other
officer of the  Borrower  designated  in  writing to the  Lenders as such by the
Board of Directors of the Borrower and reasonably acceptable to the Agent.

         "Principal Office" means the principal office of NationsBank, presently
located at 6610 Rockledge Drive, Bethesda, Maryland 20817.

         "Pro  Forma  Financials"   means,  with  respect  to  any  Acquisition,
consolidated  and  consolidating  balance  sheets and income  statements  of the
Acquisition Company and Target, as of the closing of the applicable Acquisition,
setting forth  projections for the three-year  period  following the Acquisition
after giving  effect to the closing of the related  Acquisition  Agreement,  and
setting forth in reasonable detail the assumptions  underlying such projections,
which assumptions are acceptable to the Agent in its sole discretion.

         "Prohibited  Transaction" means any "prohibited transaction" within the
meaning of Section 406 of ERISA or Section 4975 of the Code.

         "Remaining Lender" has the meaning set forth in Section 2.13.

         "Register" has the meaning set forth in Section 11.3 (c).

         "Regulation D" shall mean Regulation D of the Board of Governors of the
Federal Reserve System, as it may be amended from time to time.

         "Regulation U" shall mean Regulation U of the Board of Governors of the
Federal Reserve System, as it may be amended from time to time.

         "Reportable  Event" has the meaning  specified  therefor in Title IV of
ERISA.

         "Request  for  Extension"  has the  meaning  set forth in Section  2.13
hereof.

         "Required  Lenders"  means (a) with  respect to (i) the granting of any
increase in any Lender's  Commitment,  (ii) the granting of any reduction in the
amount,  or change in the  calculation  which would result in a reduction in the
amount,  of  principal,  interest,  or fees on any Loan,  (iii) the  granting of
extensions of time for any scheduled payment of principal, interest or fees, the
Maturity Date, or the Revolving  Commitment  Termination Date, (iv) the granting
of any  material  release  of  Collateral  subject  to  any  of  the  Collateral



                                       16
<PAGE>

Documents,  (v) the granting of any release of all or  substantially  all of the
Guarantors, or (vi) changing the definition of Required Lenders,  Non-Defaulting
Lenders having one hundred  percent  (100%) of the aggregate  Commitments of the
Non-Defaulting   Lenders;   and  (b)  with   respect   to  all  other   matters,
Non-Defaulting  Lenders  holding at least  sixty-six and two-thirds  percent (66
2/3%) of the then aggregate Commitments and unpaid principal amount of the Loans
made by the Non-Defaulting Lenders.

         "Reserve  Requirement"  means,  at any time,  the maximum rate at which
reserves (including, without limitation, any marginal, special, supplemental, or
emergency  reserves) are required to be maintained under regulations issued from
time to time by the Board of  Governors  of the Federal  Reserve  System (or any
successor) by member banks of the Federal  Reserve System against  "Eurocurrency
liabilities" (as such term is used in Regulation D). Without limiting the effect
of the  foregoing,  the Reserve  Requirement  shall  reflect any other  reserves
required to be  maintained by such member banks with respect to (i) any category
of  liabilities  which  includes  deposits by  reference  to which the  Adjusted
Eurodollar  Rate is to be  determined,  or (ii) any  category of  extensions  of
credit or other assets which include  Eurodollar Loans. The Adjusted  Eurodollar
Rate shall be  adjusted  automatically  on and as of the  effective  date of any
change in the Reserve Requirement.

         "Restricted  Margin  Stock" means Margin Stock owned by the Borrower or
any Subsidiary  which  represents  not more than 33-1/3% of the aggregate  value
(determined in accordance  with  Regulation U), on a consolidated  basis, of the
property and assets of the Borrower and its Subsidiaries  (other than any Margin
Stock) that is subject to the  provisions  of Article 7 (including  Sections 7.2
and 7.3).

         "Revolving Commitment" means each Lender's commitment to make Revolving
Loans as such  commitment  may be reduced from time to time in  accordance  with
this Agreement.

         "Revolving  Commitment   Percentage"  means  the  percentage  that  the
Revolving   Commitment  of  each  Lender  bears  to  the   Aggregate   Revolving
Commitments,  which percentage is shown on the signature pages opposite the name
of such Lender, as such percentage may be adjusted from time to time as provided
in Sections 2.13 and 11.3(a).

         "Revolving Commitment  Termination Date" means (i) three (3) years from
the  Closing  Date;  or (ii)  such  later  date as may be  agreed to by the Loan
Parties, the Lenders and the Agent pursuant to Section 2.13.

         "Revolving Loans" means Loans made pursuant to Section 2.1(a).

         "Security  Agreement" means any security agreement between the Borrower
or a Guarantor and the Agent,  substantially in the form of EXHIBIT K hereto, as
such Agreement may be amended,  supplemented  or modified from time to time, and
"Security Agreements" means all of said agreements.

         "Stated  Amount"  means the face amount of each Letter of Credit issued
under this Agreement.



                                       17
<PAGE>

         "Subsidiary"  means any  corporation  of which more than fifty  percent
(50%) (by number of votes) of the Voting  Stock is owned and  controlled  by the
Borrower  or by the  Borrower  and  one or more  Subsidiaries  or by one or more
Subsidiaries.

         "Synthetic  Lease" means any synthetic lease,  tax retention  operating
lease,  off-balance  sheet loan or similar  off-balance  sheet financing product
where the  transaction is considered  Debt for borrowed money for federal income
tax purposes but is classified as an operating lease in accordance with GAAP for
financial reporting purposes.

         "Swing Line Loans" means Loans made pursuant to Section 2.3.

         "Target"  means any  Person,  a  majority  of the stock (or  comparable
ownership  interests) of which (directly or  indirectly),  a division or similar
business unit of which, or all or  substantially  all of the assets and business
of any of the foregoing of which, are to be Acquired by an Acquisition  Company,
pursuant to the terms of an Acquisition Agreement.

         "Taxes"  means all taxes and  assessments  whether  general or special,
ordinary  or  extraordinary,  or  foreseen  or  unforeseen,  of every  character
(including  all  penalties  or  interest  thereon),  which  at any  time  may be
assessed,  levied,  confirmed  or imposed by any  Governmental  Authority on the
Borrower or any of its properties or assets or any part thereof or in respect of
any of its franchises, businesses, income or profits.

         "TCI" means TCI Central, Inc. and its successors and assigns.

         "TCI Liens"  means  those now or  hereafter  existing  Liens on certain
Equipment and Inventory of Arguss Communications Group, Inc. in favor of TCI.

         "Term  Commitments"  means each  Lender's  commitment  to make the Term
Loan.

         "Term  Commitment  Percentage"  means  the  percentage  that  the  Term
Commitment  of each  Lender  bears  to the  Aggregate  Term  Commitments,  which
percentage is shown on the signature pages opposite the name of such Lender,  as
such  percentage  may be  adjusted  from  time to time as  provided  in  Section
11.3(a).


         "Term Loan" means the Loan made pursuant to Section 2.1(b).

         "Type" shall mean either type of Revolving Loan (i.e., a Base Rate Loan
or Eurodollar Loan).

         "Unpaid Drawing" has the meaning set forth in Section 2.11(f).

         "Uniform Customs" has the meaning set forth in Section 2.11 (l).



                                       18
<PAGE>

         "Unrestricted  Margin  Stock"  means  any  Margin  Stock  owned  by the
Borrower or any Subsidiary which is not Restricted Margin Stock.

         "Withdrawing Lender" has the meaning set forth in Section 2.13.

         "Voting Stock" means securities of any class or classes, the holders of
which are  ordinarily,  in the  absence of  contingencies,  entitled  to elect a
majority of the corporate directors (or Persons performing similar functions).

         "Year  2000  Compliant"  means  the  ability  of  a  Person's  computer
applications to perform properly  date-sensitive  functions for all dates before
and after January 1, 2000.

         Section 1.2  ACCOUNTING AND OTHER TERMS.  Each definition of a document
in Section 1.1 shall include such document as modified,  amended or supplemented
from time to time, and, except where the context otherwise requires, definitions
imparting  the singular  shall  include the plural and vice versa.  Except where
restricted,  reference  to a party to a  document  includes  that  party and its
successors and assigns.  Unless otherwise specified herein, all accounting terms
used herein shall be interpreted,  all accounting determinations hereunder shall
be made, and all financial  statements  required to be delivered hereunder shall
be prepared in accordance with GAAP,  applied on a basis consistent  (except for
changes concurred in by the Borrower's  independent public accountants) with the
most recent audited  consolidated  financial  statements of the Borrower and its
Subsidiaries delivered to the Lenders.




                                       19
<PAGE>


                                    ARTICLE 2
                                    THE LOANS
                                    ---------

         Section 2.1  COMMITMENT TO MAKE THE LOANS.

                  (a)  REVOLVING  LOANS.  Upon  the  terms  and  subject  to the
conditions  hereof,  and in reliance  upon the  representations  and  warranties
herein set forth, each Lender severally and not jointly agrees to make Revolving
Loans to the Borrower, at any time and from time to time on or after the Closing
Date and  prior to the  Revolving  Commitment  Termination  Date in a  principal
amount which is equal to its  Revolving  Commitment  Percentage of the amount by
which the Aggregate  Revolving  Commitments  exceed the sum of (a) the aggregate
principal  amount of the outstanding  Revolving Loans and Swing Line Loans,  (b)
the undrawn  portion of the Stated Amount of all  outstanding  Letters of Credit
and (c) to the extent not  included in clauses (a) or (b),  all Unpaid  Drawings
under all Letters of Credit.  Within such limits, the Borrower may borrow, repay
and  reborrow  under the  Revolving  Commitment  on or after the date hereof and
prior to the  Revolving  Commitment  Termination  Date,  subject  to the  terms,
provisions  and  limitations  set forth  herein.  Revolving  Loans shall be made
ratably by the Lenders in accordance with their respective  Revolving Commitment
Percentages;  PROVIDED,  HOWEVER,  that the  failure  of any  Lender to make any
Revolving Loan shall not in itself relieve any other Lender of its obligation to
lend  hereunder.  Each Revolving Loan shall bear interest either at a rate based
on the Eurodollar Rate or the Base Rate, as the Borrower may request, subject to
and in  accordance  with the  provisions  of Section 2.2. Each Type of Revolving
Loan shall be made and maintained at such Lender's Applicable Lending Office for
such Type of Loan.  Revolving  Loans of more than one Type may be outstanding at
the same time, PROVIDED that at no time may the number of outstanding Eurodollar
Loans of each Lender exceed five (5), it being  understood  that each Eurodollar
Loan with a different Interest Period shall be counted separately.

                  (b)  TERM LOAN.

                           (i) Upon the  terms  and  subject  to the  conditions
hereof,  and in reliance  upon the  representations  and  warranties  herein set
forth,  each  Lender  severally  and not  jointly  agrees  to make a Loan to the
Borrower,  on the Closing Date, in a principal amount which is equal to its Term
Commitment  Percentage of the Aggregate  Term  Commitments.  The Term Loan shall
bear interest either at a rate based on the Eurodollar Rate or the Base Rate, as
the Borrower may request,  initially  within two (2) Business  Days prior to the
Closing Date or, if no such election is so made, at the Base Rate. The Term Loan
shall be made and maintained at such Lender's Applicable Lending Office for such
Loan.

                           (ii) The  outstanding  balance of the Term Loan shall
be repaid over a period of five (5) years in consecutive quarterly  installments
of principal in the  principal  amounts set forth below on the first day of each
March, June, September, and December hereafter, plus accrued interest thereon on
each Interest Payment Date:



                                       20
<PAGE>

                       Quarterly                   Principal
                    Payment Number               Payment Amount
                    --------------               --------------

                        1 - 12                   $1,750,000;
                        13 - 16                  $1,500,000; and
                        17 - 20                  $750,000

         Unless  sooner  paid,  the unpaid  principal  balance of the Term Loan,
together with all interest accrued therein,  shall be due and payable in full on
the Maturity Date.

         Section 2.2  NOTICE AND MANNER OF BORROWING OF REVOLVING LOANS.

                  (a) Any Revolving Loan shall, at the option of the Borrower as
provided in this Section (and, in the case of Eurodollar  Loans,  subject to the
provisions  of  Sections  3.2 and 3.3) be made  either  as a Base Rate Loan or a
Eurodollar  Loan.  The Borrower shall give the Agent at least three (3) Business
Days' prior notice of each Eurodollar Loan (which notice may be in writing or by
telecopy,  telex or telegraph,  or by  telephone,  if  immediately  confirmed in
writing,  substantially  in the form attached hereto as EXHIBIT B) (a "Notice of
Borrowing") prior to the proposed borrowing date. Each Notice of Borrowing for a
Eurodollar  Loan shall be given to the Agent prior to 11:00 a.m.,  Eastern Time,
and for  purposes of this  Section  2.2, any notice given after such time on any
day shall be  deemed  to have been  given on the  following  Business  Day.  The
Borrower  shall  give  the  Agent  notice  of each  Base  Rate  Loan as early as
reasonably  possible and in any event prior to 12:00 noon,  Eastern Time, on the
borrowing date. For each borrowing of Revolving Loans,  such Notice of Borrowing
shall specify the Type of Revolving Loan, the requested  borrowing  date,  which
shall be a Business Day, the  aggregate  amount of the proposed  Revolving  Loan
and,  if any  portion of such  borrowing  shall  consist of  different  Types of
Revolving  Loans,  or  portions  of a  Revolving  Loan with  different  Interest
Periods, the aggregate amount of such portion, each Type of Revolving Loan to be
borrowed,  the  Interest  Periods  selected  by the  Borrower  and the manner of
disbursement.  Each Base Rate Loan shall be in an aggregate  principal amount of
One  Million  Dollars  ($1,000,000)  or an  integral  multiple  of Five  Hundred
Thousand Dollars ($500,000) in excess thereof, except a Base Rate Loan may be in
an amount equal to the unused amount of the Aggregate Revolving Commitments,  as
determined  in  accordance  with the first  sentence  of  Section  2.1(a).  Each
Eurodollar  Loan shall be in an aggregate  principal  amount of Two Million Five
Hundred  Thousand Dollars  ($2,500,000) or an integral  multiple of Five Hundred
Thousand  Dollars  ($500,000) in excess thereof.  Notice of any Eurodollar Loan,
once given, shall be irrevocable. Notice of any Base Rate Loan may be revoked by
the Borrower upon delivery to the Agent,  prior to the proposed  borrowing date,
of notice of such revocation.

                  (b) Upon  receipt of a Notice of  Borrowing,  the Agent  shall
promptly  notify each Lender by  telephone,  telex,  or telecopy of the contents
thereof,  the amount of such  Lender's  portion of such  Revolving  Loan and the
applicable  interest  rate. In the case of a Notice of Borrowing for a Base Rate
Loan which is received by the Agent prior to 10:00 a.m., Eastern Time, the Agent
shall  provide such notice to each Lender not later than 12:00  (noon),  Eastern
Time on the day on which  such  notice  is  received.  In the case of any  other
Notice of Borrowing which is received by the Agent prior to 11:00 a.m.,  Eastern
Time,  the Agent shall  provide  such  notice not later than 2:00 p.m.,  Eastern



                                       21
<PAGE>

Time, on the day on which such notice is received.  Subject to the  satisfaction
of all conditions  precedent thereto as set forth herein, each Lender shall, not
later than 2:00  p.m.,  Eastern  Time,  on the date  specified  in the Notice of
Borrowing,  deposit to the  Agent's  Account,  in  federal or other  immediately
available funds, such Lender's Revolving Commitment Percentage of such Revolving
Loan.  Unless  the Agent  shall have  received  prior  notice  from a Lender (by
telephone or otherwise,  such notice to be promptly confirmed by telex, telecopy
or other  writing)  that  such  Lender  will not make  available  such  Lender's
Revolving  Commitment  Percentage of such  Revolving  Loan, the Agent may assume
that such Lender has made such amount available to the Agent on the date of such
Revolving  Loan in accordance  with this Section  2.2(b),  and the Agent may, in
reliance  upon such  assumption,  make  available to the Borrower on such date a
corresponding  amount. If and to the extent such Lender shall not have made such
amount available to the Agent,  such Lender and the Borrower  severally agree to
repay to the Agent  forthwith  on demand (but without  duplication)  such amount
together  with  interest  thereon for each day from the date such amount is made
available to the Borrower  until the date such amount is repaid to the Agent (i)
with respect to the Borrower,  at the interest  rate  applicable at the time the
Type of Revolving  Loan is chosen,  or (ii) with  respect to the Lender,  at the
Federal  Funds Rate.  Such payment by the  Borrower,  however,  shall be without
prejudice to its rights  against such Lender.  If such Lender shall repay to the
Agent such amount together with interest, such amount so repaid shall constitute
such Lender's  Revolving Loan for purposes of this  Agreement,  which  Revolving
Loan  shall be deemed to have been  made by such  Lender on the  borrowing  date
applicable thereto,  but without prejudice to the Borrower's rights against such
Lender.

         Section 2.3  SWING LINE LOANS.

                  (a) Upon the terms and subject to the conditions  hereof,  and
in  reliance  upon  the   representations   and  warranties  herein  set  forth,
NationsBank  agrees to make a loan or loans to the Borrower  (each a "Swing Line
Loan" and  collectively,  the "Swing  Line  Loans"),  which Swing Line Loans (i)
shall  be made as  Base  Rate  Loans;  (ii)  may be  repaid  and  reborrowed  in
accordance  with the  provisions  hereof;  (iii)  shall not exceed in  aggregate
principal amount at any time  outstanding the amount of the Aggregate  Revolving
Commitments  minus the aggregate  principal  amount of all Revolving  Loans then
outstanding,  the Stated Amount of all Letters of Credit, and, to the extent not
included in the amount of such Revolving Loans or Letters of Credit,  the amount
of  all  Unpaid   Drawings;   (iv)  shall  not  exceed  Five   Million   Dollars
($5,000,000.00) in aggregate principal amount at any time outstanding; (v) shall
be made in accordance with any autoborrow service agreement between the Borrower
and  NationsBank;  and (vi) shall not be made  after  NationsBank  has  received
written notice from the Required  Lenders that a Default or Event of Default has
occurred and is continuing.


                  (b)  On  any  Business  Day,  NationsBank  may,  in  its  sole
discretion,  give notice to the Agent and the Lenders  (other than  NationsBank)
that its  outstanding  Swing  Line Loans  shall be funded  with a  borrowing  of
Revolving  Loans  (PROVIDED  that each such notice  shall be deemed to have been
automatically given upon the occurrence of an Event of Default), in which case a



                                       22
<PAGE>

borrowing of Revolving Credit Loans  constituting  Base Rate Loans shall be made
on the immediately  succeeding  Business Day by all of the Lenders ratably based
upon each Lender's  Revolving  Commitment  Percentage,  and the proceeds thereof
shall be applied directly to repay  NationsBank for such outstanding  Swing Line
Loans.  Each Lender hereby  irrevocably  agrees to make Base Rate Loans upon one
(1)  Business  Day's  notice in the amount and in the  manner  specified  in the
preceding   sentence  and  on  the  date  specified  in  writing  by  the  Agent
notwithstanding  (i) that the amount of such  borrowing  may not comply with the
minimum  borrowing  amounts  otherwise  required  hereunder,  (ii)  whether  any
conditions specified in Section 5.2 are then satisfied,  (iii) whether a Default
or Event of Default has occurred and is  continuing,  and (iv) any  reduction in
the Aggregate  Revolving  Commitments after any such Swing Line Loans were made.
In the event that any  borrowing  pursuant  to this  Section  2.3 cannot for any
reason  be  made  on the  date  otherwise  required  above  (including,  without
limitation, as a result of the commencement of a proceeding under the Bankruptcy
Code in respect of the Borrower),  each Lender (other than  NationsBank)  hereby
agrees that it shall forthwith  purchase from NationsBank  (without  recourse or
warranty)  such  assignment  of the  outstanding  Swing  Line  Loans as shall be
necessary to cause the Lenders to share in such Swing Line Loans  ratably  based
upon  their  respective  Revolving  Commitment  Percentages,  PROVIDED  that all
interest payable on the Swing Line Loans shall be for the account of NationsBank
until the date the  respective  Revolving  Loan is purchased  and, to the extent
attributable  to the purchased  Revolving  Loan,  shall be payable to the Lender
purchasing such Revolving Loan from and after such date of purchase.

                  (c) Whenever the Borrower  desires to borrow a Swing Line Loan
hereunder,  it shall deliver to  NationsBank  irrevocable  notice thereof (which
notice may be in writing or by telecopy, telex or telegraph, or by telephone, if
immediately  confirmed  in  writing,  substantially  in the form of a Notice  of
Borrowing)  not later than 1:00 p.m.,  Eastern Time,  on the proposed  borrowing
date.  Such notice  shall  specify (i) the date of such  borrowing  and (ii) the
amount of the Swing Line Loan.

         Section 2.4  CONTINUATION AND CONVERSIONS.

                  (a) Subject to Sections 3.2 and 3.3 hereof, the Borrower shall
have the option,  from time to time, to elect to convert or continue the Type of
Loan as follows:

                           (i) if such Loan is a Base Rate  Loan,  the  Borrower
may elect,  as of any Business Day, to convert such Loan or a portion thereof in
the amount of One Million Dollars  ($1,000,000) or an integral  multiple of Five
Hundred Thousand Dollars ($500,000) in excess thereof to a Eurodollar Loan; and


                           (ii) if such Loan is a Eurodollar  Loan, the Borrower
may elect to convert such Loan or a portion  thereof to a Base Rate Loan, or may
elect to continue  such Loan or a portion  thereof as a  Eurodollar  Loan for an
additional  Interest Period,  in each case beginning on the last day of the then
current Interest Period  applicable to such Loan;  PROVIDED that (A) no election
of a  Eurodollar  Loan may be made if a Default or Event of  Default  shall have



                                       23
<PAGE>

occurred  and  be  continuing,  (B)  unless  the  outstanding  principal  amount
outstanding is less than One Million Dollars  ($1,000,000),  no conversion shall
reduce the outstanding  principal amount of a Eurodollar Loan to an amount which
is not One Million Dollars  ($1,000,000) or an integral multiple of Five Hundred
Thousand Dollars ($500,000) in excess thereof,  and (C) the amount of such Loan,
when aggregated with all other Loans outstanding hereunder, the Stated Amount of
all Letters of Credit issued  hereunder,  and, to the extent not included in the
amount of such Loans or Letters  of Credit,  the amount of all Unpaid  Drawings,
would not exceed the Aggregate Commitments.

                  (b) Each  Continuation or Conversion  shall be effected by the
Borrower's  delivering  to the Agent  notice  thereof  (which  notice  may be in
writing or by telecopy,  telex or  telegraph,  or by telephone,  if  immediately
confirmed in writing, substantially in the form attached hereto as EXHIBIT C) (a
"Notice of  Continuation/Conversion") at least (i) one (1) Business Day prior to
a Conversion  by the Borrower of a Eurodollar  Loan to a Base Rate Loan and (ii)
in all other cases,  three (3)  Business  Days prior to the date of the proposed
Continuation  or  Conversion,  each such notice to be given prior to 11:00 a.m.,
Eastern  Time,  on the date  specified.  Each Notice of  Continuation/Conversion
shall be  irrevocable  and shall  specify  the Type of Loan to be  Continued  or
Converted,  the aggregate principal amount thereof and the Interest Period to be
applicable  thereto.  In the  event  no  Notice  of  Continuation/Conversion  is
delivered by the Borrower with respect to any Eurodollar Loan in conformity with
this  Section 2.4 (b),  then such Loan shall be  Continued  as a Base Rate Loan.
Notwithstanding  the  foregoing or the  provisions  of Section 2.5 hereof,  if a
Default  or Event of Default  shall have  occurred  and be  continuing  or would
result from any proposed Continuation of a Eurodollar Loan, such Loan may not be
Continued as a Eurodollar Loan but instead shall be  automatically  Converted on
the last day of such Interest Period into a Base Rate Loan

         Section 2.5  PERMITTED ACQUISITIONS.

                  (a) The Revolving Loans may be used by the Borrower to finance
Acquisitions  by any  Acquisition  Company  which  comply  with  the  terms  and
conditions  set  forth in this  Section  2.5,  as well as the  other  terms  and
conditions  set  forth  in this  Agreement  for  such  Acquisitions  ("Permitted
Acquisitions"). Each Permitted Acquisition must comply with all of the following
conditions on or before the date of such Permitted Acquisition (unless otherwise
specifically provided below):

                           (i) An executed letter of intent with respect to such
Acquisition,  a  PRO  FORMA  No-Default  Certificate  and  supporting  Pro-Forma
Financials, and an Acquisition Analysis shall be delivered to the Agent at least
ten (10) Business Days before the closing of the Acquisition. Said documentation
shall reflect that,  after giving effect to such  Acquisition,  the Borrower and
its Subsidiaries  will be in compliance with all of the financial  covenants set
forth in Section 6.10 of this Agreement.  True and substantially complete copies
of the applicable Acquisition Agreement shall be delivered to the Agent not more
than five (5) days after the closing of the Acquisition.



                                       24
<PAGE>

                           (ii) The Target shall be in substantially the same or
a related line of business as the Borrower or any of its Subsidiaries, excluding
Conceptronic.

                           (iii) The  Target  must be  incorporated  within  the
United States of America.

                           (iv) If the Permitted Acquisition is a stock purchase
transaction,  a majority  (in number of votes) of the Voting Stock of the Target
shall, as a result of said  Acquisition,  be directly or indirectly owned by the
Acquisition  Company.  In the case of a merger, the Acquisition  Company must be
the surviving entity.

                           (v) No Default  shall have occurred and be continuing
or result from the Acquisition.

                           (vi) The  Permitted  Acquisition  Price shall not (A)
exceed twenty five percent  (25%) of the  Borrower's  Consolidated  Net Worth as
shown on the most recent  Financial  Statements  required to be delivered to the
Lenders  pursuant  to  Sections  6.1(a)  and (b),  or (B)  cause  the  aggregate
Permitted  Acquisition  Price for all such  Acquisitions to exceed the lesser of
(aa)  Thirty  Million  Dollars  ($30,000,000)  in any twelve  (12) month  period
(excluding the Permitted  Acquisition Price of any such  Acquisitions  which are
expressly  approved by the Required  Lenders during such period),  or (bb) fifty
percent  (50%) of the  Borrower's  Consolidated  Net Worth in any fiscal year as
shown on the most recent  Financial  Statements  required to be delivered to the
Lenders pursuant to Sections 6.1(a) and (b).

                  (b) Each  Subsidiary  that is in  existence  on,  or formed or
Acquired on or after,  the  Closing  Date,  shall  become a  Guarantor,  and the
Borrower  shall  cause each such  Subsidiary  to satisfy  each of the  following
conditions forthwith upon such Subsidiary's formation or Acquisition,  except as
otherwise set forth below:

                           (i) Such Subsidiary  shall execute and deliver to the
Agent a  Guaranty,  and,  within  thirty  (30)  days  after the  Acquisition  or
formation,  a  Security  Agreement,  and if  such  Subsidiary  has  intellectual
property, an Intellectual Property Assignment.

                           (ii) All legal matters incident to such  Subsidiary's
becoming a Guarantor shall be reasonably  satisfactory to counsel for the Agent,
and the  Subsidiary  shall execute and deliver to the Agent,  within thirty (30)
days  after  the  Acquisition  or  formation,   such  additional  documents  and
certificates relating to the Loans as the Agent reasonably may request.

                           (iii) The Agent shall have  received,  within  thirty
(30) days  after the  Acquisition  or  formation,  an opinion of counsel to such
Subsidiary,  addressed  to the  Agent,  covering  such  matters as the Agent may
reasonably request, in form and substance reasonably satisfactory to the Agent.

                           (iv)  Financing  statements  in  form  and  substance
reasonably  satisfactory  to the Agent  shall have been  properly  filed in each
office  where  necessary  to perfect the  security  interest of the Agent in the
Collateral  of  such  Subsidiary,   and,  within  thirty  (30)  days  after  the



                                       25
<PAGE>

Acquisition or formation,  (A) termination statements shall have been filed with
respect to any other  financing  statements  covering all or any portion of such
Collateral  (except with respect to Liens permitted by this Agreement),  (B) all
Taxes and fees with respect to such recording and filing shall have been paid by
such  Subsidiary or the Borrower and (C) the Agent shall have received such Lien
searches or reports as it shall reasonably require confirming that the foregoing
filings and recordings have been completed.

                           (v)  Such   Subsidiary   shall  have   delivered  the
following  documents  to the Agent,  each of which shall be  certified as of the
date on which such  Subsidiary  is to become a  Guarantor,  by its  secretary or
representative  performing  similar  functions:  (1) copies of  evidence  of all
actions taken by such  Subsidiary to authorize the execution and delivery of the
applicable  Loan  Documents;  (2)  copies  of the  articles  or  certificate  of
incorporation and bylaws (or the  organizational  documents for a Guarantor that
is not a  corporation)  of  such  Subsidiary;  and (3) a  certificate  as to the
incumbency and signatures of the officers of such Subsidiary  executing the Loan
Documents.

                           (vi)  The   Agent   shall   have   received   current
certificates of good standing and qualification  issued by the appropriate state
official of the state of formation of such  Subsidiary and in each  jurisdiction
in which it is qualified to do business.

                           (vii) The Agent shall have  received,  within  thirty
(30) days after the Acquisition or formation, such information and documents the
Agent may reasonably request with respect to the Collateral of such Subsidiary.

                           (viii) If required by the Agent, the Agent shall have
received,  within  thirty  (30)  days  after the  Acquisition  or  formation,  a
satisfactory field examination of the Collateral and internal control systems of
such  Subsidiary  performed  by a  consultant  selected  by the  Agent,  and the
Borrower shall have reimbursed the Agent for the cost of such consultant.

                           (ix) All securities of each Domestic Subsidiary,  and
sixty five percent (65%) of the securities of each Foreign Subsidiary,  owned by
the  Acquisition  Company after the Acquisition or formation shall be subject to
the  Lien of the  Acquisition  Company's  Pledge  Agreement,  and  the  original
certificates representing such securities shall be delivered to the Agent within
thirty  (30)  days  after  such  Acquisition  or  formation,  together  with the
appropriate stock powers or other instruments of assignment, and such additional
documents  as may be required to perfect the  Agent's  security  interest  under
applicable law.

                           (x)  If  reasonably   required  by  the  Agent,  such
Subsidiary  shall have used reasonable  efforts to obtain a landlord waiver from
each  landlord  of  such  Subsidiary,  which  shall  be in  form  and  substance
reasonably acceptable to the Agent.

                           (xi) If  required  by the Agent,  within  thirty (30)
days after the  Acquisition  or  formation,  all  intellectual  property of such
Subsidiary  that is  subject to United  States  copyright,  patent or  trademark
protection  shall have been duly  registered  with the Register of Copyrights or
the United States Patent and Trademark  Office,  as applicable,  an Intellectual



                                       26
<PAGE>

Property Assignment shall have been recorded in such office, and the Agent shall
have received evidence that it has a first priority  perfected Lien with respect
thereto.

                  (c) The  Borrower  shall  provide  Agent  with  the  foregoing
information  not less than ten (10) Business Days prior to each  Acquisition and
the Agent will  request  the  consent of the  Required  Lenders  within five (5)
Business  Days  after the  receipt  thereof.  The Agent may after  notice to the
Borrower,  reset the  Applicable  Margin and Commitment Fee on Unused Portion of
Loan Rate on the basis of the Pro Forma  Financials  received in connection with
any Acquisition.

         Section 2.6  THE NOTES. (a) The Revolving Loans from each Lender to the
Borrower  shall be evidenced by a single note of the Borrower  dated the Closing
Date  payable  to the  order  of such  Lender  in the form of  EXHIBIT  A-1 (the
"Revolving Credit Notes").

                  (b) The Term Loan from each  Lender to the  Borrower  shall be
evidenced by a single note of the Borrower dated the Closing Date payable to the
order of such Lender in the form of EXHIBIT A-2 (the "Term Notes").

                  (c) The Swing Line Loans to the Borrower shall be evidenced by
a single note of the  Borrower  dated the Closing  Date  payable to the order of
NationsBank in the form of EXHIBIT A-3 (the "Swing Line Note").

                  Each Lender is hereby authorized to record on a Note or on its
internal  records  the amount and date of each Loan,  and the date and amount of
each repayment of a Loan; PROVIDED that the failure to make any such notation or
any error therein  shall not affect the  Borrower's  obligation  with respect to
such Loan.

         Section 2.7  TERMINATION AND OPTIONAL REDUCTION OF REVOLVING LOAN 
                      COMMITMENTS.

                  (a) The Revolving Commitment of each Lender shall terminate on
the Revolving  Commitment  Termination  Date and the aggregate  unpaid principal
amount of all  Revolving  Loans and Swing Line Loans,  together with all accrued
and unpaid  interest  thereon,  and all amounts payable under this Agreement and
any other Loan  Document in respect of such Loans shall be paid by the  Borrower
to the Agent for the ratable account of the Lenders on such date.

                  (b) The  Borrower  may at any  time  upon at least  three  (3)
Business  Days' prior  notice to the Agent  terminate,  or and from time to time
ratably reduce the respective Revolving  Commitments of the Lenders to an amount
not less than the sum of (x) the  aggregate  principal  amount of the  Revolving
Loans then outstanding  (after giving effect to any  contemporaneous  prepayment
thereof),  (y) the Stated Amount of Letters of Credit then outstanding,  and (z)
to the  extent not  included  in  clauses  (x) or (y),  the amount of all Unpaid
Drawings,  or terminate the  respective  Revolving  Commitments  of the Lenders,
without  penalty or  premium,  provided  that the  aggregate  amount of any such
reduction  shall be in the  amount of One  Million  Dollars  ($1,000,000)  or an
integral multiple of Five Hundred Thousand Dollars ($500,000) in excess thereof.



                                       27
<PAGE>

Such notice of reduction  may be in writing or by telecopy,  telex or telegraph,
or by telephone,  if promptly  confirmed in writing.  From the effective date of
any such  reduction or  termination,  the  obligations  of the Borrower to pay a
Commitment  Fee on the Unused  Portion of the Loan under  Section  2.9(a)  shall
thereupon correspondingly be reduced.

         Section 2.8  INTEREST.

                  (a) The Borrower  shall pay  interest on the unpaid  principal
amount of each Base Rate Loan at a rate per annum  equal to the Base Rate,  plus
the Applicable Margin.  Such rate will be adjusted as of the date of each change
in the Base Rate or in the  Applicable  Margin.  Interest on each Base Rate Loan
shall be computed on the basis of the actual  number of days elapsed over a year
of 360 days, and shall be due and payable in arrears on the applicable  Interest
Payment Date.

                  (b) The Borrower  shall pay  interest on the unpaid  principal
amount  of each  Eurodollar  Loan at a rate  per  annum  equal  to the  Adjusted
Eurodollar Rates, plus the Applicable  Margin.  The Agent,  whose  determination
shall be  conclusive  (absent  manifest  error),  shall  determine  the Adjusted
Eurodollar  Rate on the  second  Business  Day  prior  to the  first  day of the
applicable Interest Period and shall notify the Borrower and each Lender of such
rate.  Interest  on each  Eurodollar  Loan shall be computed on the basis of the
actual  number  of days  elapsed  over a year of 360 days  and  shall be due and
payable in arrears on the applicable Interest Payment Date. Any principal amount
which is not paid when due and, to the extent  permitted by applicable  law, any
installment of interest which is not paid when due shall bear interest at a rate
two percent (2.0%) per annum above the otherwise applicable rate.

         Section 2.9  FEES.

                  (a) The  Borrower  agrees  to pay the  Agent  for the  ratable
account of the Lenders quarterly in arrears on each March 31, June 30, September
30 and December 31, to and including the Revolving Commitment  Termination Date,
a fee (the  "Commitment Fee on Unused Portion of the Loan Rate") at the rate per
annum equal to the  Commitment Fee on the Unused Portion of the Loan Rate on the
aggregate  amount of the unused portion of the Revolving  Commitments,  plus the
aggregate  outstanding  balance of Swingline  Loans,  during the period from the
Closing Date to the Revolving Commitment Termination Date.

                  (b) The Borrower  will pay the Agent for its services as agent
for the Lenders  hereunder a fee (the  "Agent's  Fee") as provided in the letter
dated December 15, 1998 from the Agent and NMS to the Borrower.

                  (c) The Borrower  shall pay the following fees (the "Letter of
Credit Fees") in U.S. Dollars:

                           (i)  Quarterly  in arrears on each March 31, June 30,
September  30  and  December  31,  to and  including  the  Revolving  Commitment
Termination Date, a fee to the Issuing Bank in an amount equal to the product of
(i) one-eighth of one percent  (.125%) per annum,  (ii) the amount drawn on each



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<PAGE>

Letter of Credit issued hereunder and (iii) the period  (expressed as a fraction
of a year) during which such Letter of Credit was outstanding.

                           (ii) In  arrears  on March 31,  1999,  and  quarterly
thereafter  on each March 31,  June 30,  September  30 and  December  31, to and
including the Revolving Commitment  Termination Date, a fee to the Agent for the
account of each Lender in an amount equal to the product of (i) the LC Fee Rate,
(ii) the Stated Amount of such Letter of Credit  issued  hereunder and (iii) the
period  (expressed  as a fraction of a year)  during which such Letter of Credit
was outstanding.

                  (d) All  computations  of fees hereunder  shall be made on the
basis of a year of 360 days for the actual number of days elapsed.

         Section 2.10  PREPAYMENTS.  The Borrower  shall have the right  without
premium  or  penalty  to  prepay  the Term  Loans  in  whole or to make  partial
prepayments in an aggregate  amount of One Million  Dollars  ($1,000,000)  or an
integral multiple of Five Hundred Thousand Dollars  ($500,000) in excess thereof
in the case of Base Rate Loans,  and Two Million Five Hundred  Thousand  Dollars
($2,500,000) or an integral multiple of Five Hundred Thousand Dollars ($500,000)
in excess thereof in the case of Eurodollar  Loans, at any time and from time to
time upon same  Business  Day notice to the Agent in the case of Base Rate Loans
or not less than  three (3)  Business  Days'  notice to the Agent in the case of
Eurodollar  Loans,  PROVIDED that no Term Loan may be prepaid  unless a pro rata
payment, based upon the respective amounts loaned by each Lender, is made on all
Term Loans on the same date,  and PROVIDED  FURTHER that any  prepayment  of any
Eurodollar  Loan shall be subject to Section 3.5. Such notice of prepayment  may
be in writing or by telecopy,  telex or telegraph,  or by telephone, if promptly
confirmed  in writing.  After  giving  effect to any partial  prepayment  of any
Eurodollar Loan, the aggregate outstanding principal amount thereof shall be Two
Million Five Hundred  Thousand Dollars  ($2,500,000) or an integral  multiple of
Five Hundred  Thousand Dollars  ($500,000) in excess thereof.  Any prepayment of
principal  shall not affect the  obligation  of the Borrower to make  subsequent
scheduled  principal payments at the times and in the amounts required until the
Notes are paid in full.

         Section 2.11  LETTERS OF CREDIT.

                  (a) Upon the terms and  subject  to the  conditions  set forth
herein,  the  Borrower may request the issuance of one or more Letters of Credit
for  the  account  of the  Borrower  or its  Subsidiaries  in a form  reasonably
acceptable  to the Agent and the Issuing Bank, at any time and from time to time
on or after the Closing Date and prior to the Revolving  Commitment  Termination
Date and, upon the terms and subject to the  conditions of, and in reliance upon
the  representations and warranties herein set forth, the Issuing Bank agrees to
issue from time to time,  Letters of Credit in such form as may be  approved  by
the Issuing Bank.

                  (b)  Notwithstanding  the  foregoing,  (i) no Letter of Credit
shall be issued the Stated  Amount of which,  when added to the Stated Amount of
outstanding  Letters of Credit (exclusive of Unpaid Drawings which are repaid on
the date of, and prior to the issuance of, the  respective  Letter of Credit) at



                                       29
<PAGE>

such time, either (A) would exceed Ten Million Dollars ($10,000,000.00) (the "LC
Subfacility")  or (B)  when  added  to the  aggregate  principal  amount  of all
Revolving  Loans and the  Stated  Amount of all  Letters  of Credit  outstanding
hereunder,  other than any to be replaced thereby,  and the amount of all Unpaid
Drawings not included in the amount of such  Revolving  Loans or such Letters of
Credit,  would exceed the  Aggregate  Revolving  Commitments,  (ii) no Letter of
Credit  shall be issued if any Default or Event of Default  shall have  occurred
and be  continuing,  and (iii) no Letter of  Credit  shall  have an expiry  date
occurring  later  than the  Business  Day  next  preceding  the then  applicable
Revolving Commitment Termination Date.

                  (c)  Whenever  it  desires  that a Letter of Credit be issued,
amended,  renewed or extended, the Borrower shall give the Agent and the Issuing
Bank written notice thereof (each a "Letter of Credit  Request")  prior to 12:00
(noon),  Eastern  Time,  at least three (3) Business  Days prior to the proposed
date of issuance,  amendment,  renewal or  extension  (which shall be a Business
Day) which Letter of Credit Request shall include the Issuing  Bank's  customary
application for a letter of credit containing information necessary to issue the
Letter of Credit  and any other  documents  that the  Issuing  Bank  customarily
requires in connection therewith. The Agent shall promptly notify each Lender of
each Letter of Credit  Request.  In the event of any  inconsistency  between the
terms and  conditions of this Agreement and the terms and conditions of any form
of letter of credit application or other agreement  submitted by the Borrower or
entered into by the Borrower with the Issuing Bank with respect to any Letter of
Credit, the terms and conditions of this Agreement shall control.

                  (d)  The  aggregate   principal  amount  available  under  the
Revolving Loans and the LC Subfacility  shall be reduced by the Dollar amount of
each Letter of Credit issued hereunder.

                  (e) The  submission of each Letter of Credit  Request shall be
deemed to be a  representation  and warranty by the Borrower that such Letter of
Credit may be issued in accordance  with, and will not violate the  requirements
of, Section  2.11(b).  Unless the Issuing Bank has received  written notice from
the Required Lenders before it issues a Letter of Credit that one or more of the
conditions  specified  in  Section  5.2  were not  then  satisfied,  or that the
issuance of such Letter of Credit would  violate  Section  2.11(b),  the Issuing
Bank may issue the requested Letter of Credit for the account of the Borrower in
accordance  with its usual and  customary  practices.  The  Issuing  Bank shall,
promptly  following  the  issuance  of a Letter of Credit by it, give the Agent,
each Lender and the  Borrower  written  notice of the issuance of such Letter of
Credit.

                  (f) The Borrower  hereby agrees to reimburse the Issuing Bank,
by making payment to the Issuing Bank in immediately  available  funds,  for any
payment  or  disbursement  made by the  Issuing  Bank under any Letter of Credit
issued by it (each such amount so paid or disbursed until reimbursed, an "Unpaid
Drawing") no later than one (1) Business Day  following the date of such payment
or disbursement, with interest on the amount so paid or disbursed by the Issuing
Bank, to the extent not reimbursed prior to 1:00 p.m., Eastern Time, on the date
of such payment or  disbursement,  from and including the date paid or disbursed



                                       30
<PAGE>

to but not including the date the Issuing Bank is reimbursed  therefor at a rate
per annum equal to the Base Rate (plus an additional  two percent (2%) per annum
if not  reimbursed  by the third  Business Day after the date of such payment or
disbursement),  such  interest  also to be payable on demand.  The Issuing  Bank
shall provide the Borrower prompt notice of any drawing made under any Letter of
Credit  prior to any  payment  or  disbursement  made by it on  account  of such
drawing,  although the failure of, or delay in, giving any such notice shall not
release or diminish the  obligations of the Borrower under this Section  2.11(f)
or under any other Section of this Agreement.

                  (g) The  Borrower's  obligation  to  reimburse  as provided in
paragraph (f) of this Section shall be absolute,  unconditional and irrevocable,
and shall be performed  strictly in accordance  with the terms of this Agreement
under any and all circumstances whatsoever and irrespective of:

                           (i) any lack of  validity  or  enforceability  of any
Letter of Credit or this Agreement, or any term or provision therein;

                           (ii) any  amendment  or waiver of or any  consent  to
departure  from all or any of the  provisions  of any  Letter  of Credit or this
Agreement;

                           (iii) the existence of any claim, setoff,  defense or
other  right that the  Borrower,  any other  party  guaranteeing,  or  otherwise
obligated with, the Borrower,  any Subsidiary or other Affiliate  thereof or any
other  Person may at any time have against the  beneficiary  under any Letter of
Credit,  the Issuing Bank, the Agent or any Lender or any other Person,  whether
in connection with this Agreement or any other related or unrelated agreement or
transaction;

                           (iv) any draft or other  document  presented  under a
Letter of Credit  proving to be forged,  fraudulent or invalid in any respect or
any statement therein being untrue or inaccurate in any respect;

                           (v)  payment  by the  Issuing  Bank under a Letter of
Credit  against  presentation  of a draft or other document that does not comply
with the terms of such Letter of Credit; and

                           (vi) any other act or omission to act or delay of any
kind of the Issuing Bank, any Lender, the Agent or any other Person or any other
event  or  circumstance  whatsoever,  whether  or  not  similar  to  any  of the
foregoing,  that might,  but for the  provisions of this  Section,  constitute a
legal or equitable discharge of the Borrower's obligations hereunder.

Neither the Agent, any Lender,  nor the Issuing Bank shall have any liability or
responsibility  by reason of or in  connection  with the issuance or transfer of
any Letter of Credit or any payment or failure to make any  payment  thereunder,
including any of the circumstances  specified in clauses (i) through (vi) above,
as well as any error, omission,  interruption,  loss or delay in transmission or
delivery of any draft,  notice or other  communication  under or relating to any
Letter of Credit (including any document required to make a drawing thereunder),



                                       31
<PAGE>

any error in interpretation  of technical terms or any consequence  arising from
causes beyond the control of the Issuing Bank; PROVIDED that the foregoing shall
not be construed  to excuse the Issuing  Bank from  liability to the Borrower to
the extent of any direct damages (as opposed to consequential damages, claims in
respect of which are hereby  waived by the  Borrower to the extent  permitted by
applicable  law) suffered by the Borrower that are caused by the Issuing  Bank's
failure  to  exercise  the  agreed  standard  of care (as set  forth  below)  in
determining  whether  drafts  and other  documents  presented  under a Letter of
Credit comply with the terms thereof.  The parties hereto  expressly  agree that
the Issuing Bank shall have exercised the agreed standard of care in the absence
of gross  negligence  or willful  misconduct  on the part of the  Issuing  Bank,
except to the extent that applicable law requires a different  standard of care.
Without  limiting the  generality of the  foregoing,  it is understood  that the
Issuing Bank may accept documents that appear on their face to be in substantial
compliance  with the terms of a Letter of  Credit,  without  responsibility  for
further investigation,  regardless of any notice or information to the contrary,
and may make payment upon presentation of documents that appear on their face to
be in substantial  compliance with the terms of such Letter of Credit;  PROVIDED
that the Issuing Bank shall have the right, in its sole  discretion,  to decline
to accept such  documents and to make such payment if such  documents are not in
strict compliance with the terms of such Letter of Credit.

                  (h)  Immediately  upon the issuance by the Issuing Bank of any
Letter of Credit,  the Issuing Bank shall be deemed to have sold and transferred
to  each  other  Lender,  and  each  such  Lender  (each  a  "Letter  of  Credit
Participant")  shall be deemed irrevocably and unconditionally to have purchased
and received from the Issuing Bank,  without recourse or warranty,  an undivided
interest and participation,  to the extent of such Lender's Revolving Commitment
Percentage,  in such Letter of Credit,  each substitute  letter of credit,  each
drawing made thereunder and the obligations of the Borrower under this Agreement
with respect thereto and any security therefor or guaranty  pertaining  thereto.
Upon any change in the  Commitments or Revolving  Commitment  Percentages of the
Lenders  pursuant to Section 11.3, it is hereby agreed that, with respect to all
outstanding  Letters of Credit and Unpaid Drawings,  there shall be an automatic
adjustment to the participations pursuant to this Section 2.11(h) to reflect the
new Revolving Commitment  Percentages of the assigning and assignee Lender or of
all Lenders, as the case may be.

                  (i) In determining  whether to pay under any Letter of Credit,
the Issuing Bank shall have no obligation  to the Letter of Credit  Participants
other than to determine that any documents  required to be delivered  under such
Letter of Credit  have been  delivered  and that they  appear to comply on their
face with the requirements of such Letter of Credit. Any action taken or omitted
to be taken by the Issuing Bank under or in connection with any Letter of Credit
if taken or omitted in the absence of gross  negligence  or willful  misconduct,
shall not create for the Issuing  Bank or the Agent any  resulting  liability to
any Letter of Credit Participant.

                  (j) In the event that the Issuing Bank makes any payment under
any Letter of Credit and the Borrower  shall not have repaid such amount in full
to the Issuing Bank pursuant to Section 2.11(f), the Issuing Bank shall promptly
notify the Agent,  and the Agent shall notify each Letter of Credit  Participant
of such  failure,  and each  Letter of Credit  Participant  shall  promptly  and
unconditionally  pay to the Agent for the account of the Issuing Bank the amount



                                       32
<PAGE>

of such Letter of Credit Participant's  Revolving Commitment  Percentage of such
unpaid  amount in same day funds.  If the Agent so notifies any Letter of Credit
Participant  required to fund a payment  under a Letter of Credit prior to 11:00
a.m., Eastern Time, on any Business Day, such Letter of Credit Participant shall
make  available  to the Agent for the account of the Issuing Bank such Letter of
Credit  Participant's  Revolving  Commitment  Percentage  of the  amount of such
payment on such Business Day in same day funds. If and to the extent such Letter
of Credit Participant shall not have so made its Revolving Commitment Percentage
of the  amount of such  payment  available  to the Agent for the  account of the
Issuing Bank, such Letter of Credit  Participant  agrees to pay to the Agent for
the account of the Issuing Bank, forthwith on demand, such amount, together with
interest thereon, for each day from such date until the date such amount is paid
to the Agent for the account of the Issuing Bank at the Federal Funds Rate.  The
failure of any Letter of Credit  Participant  to make available to the Agent for
the account of the  Issuing  Bank its  Revolving  Commitment  Percentage  of any
payment  under any Letter of Credit shall not relieve any other Letter of Credit
Participant of its  obligation  hereunder to make available to the Agent for the
account of the Issuing Bank its Revolving  Commitment  Percentage of any payment
under any Letter of Credit on the date  required,  as  specified  above,  but no
Letter of Credit  Participant  shall be responsible for the failure of any other
Letter of Credit  Participant  to make available to the Agent for the account of
the Issuing Bank such other Letter of Credit Participant's  Revolving Commitment
Percentage of any such payment.

                  (k)  Whenever  the  Issuing  Bank  receives  a  payment  of  a
reimbursement  obligation as to which the Issuing Bank has received any payments
from the Letter of Credit Participants pursuant to clause (j) above, the Issuing
Bank shall pay such amount to the Agent and the Agent shall promptly pay to each
Letter of Credit Participant which has paid its Revolving Commitment  Percentage
thereof  in  same  day  funds,   an  amount  equal  to  such  Letter  of  Credit
Participant's  Revolving  Commitment  Percentage of the principal amount thereof
and  interest   thereon   accruing   after  the   purchase  of  the   respective
participations.

                  (l) Except as otherwise expressly stated herein, any Letter of
Credit issued  hereunder  shall be subject to the Uniform  Customs and Practices
for  Documentary  Credits,  1993  Revision,  International  Chamber of  Commerce
Publication No. 500 or ISP98 ("Uniform Customs").  As to matters not governed by
this  Agreement  or by the  Uniform  Customs,  any  Letter  of  Credit  shall be
construed  in  accordance  with,  and  governed  by,  the  laws of the  State of
Maryland.

                  (m) If any Event of Default shall occur and be continuing,  on
the  Business  Day that  the  Borrower  receives  notice  from the  Agent or the
Required  Lenders  demanding  the  deposit of cash  collateral  pursuant to this
paragraph,  the Borrower shall deposit in an account with the Agent, in the name
of the Agent and for the benefit of the Lenders,  an amount in Dollars  equal to
the stated  amount of all  outstanding  Letters of Credit  plus any  accrued and
unpaid  interest  thereon;  PROVIDED  that the  obligation  to deposit such cash
collateral  shall become  effective  immediately,  and such deposit shall become
immediately  due and payable,  without demand or other notice of any kind,  upon
the occurrence of any Event of Default with respect to the Borrower described in
Sections  8.1(i).  Such deposit shall be held by the Agent as collateral for the
payment and performance of the obligations of the Borrower under this Agreement.



                                       33
<PAGE>

The Agent shall have  exclusive  dominion and control,  including  the exclusive
right of withdrawal,  over such account.  Investment of such deposits  shall, to
the extent reasonably practicable,  be made at the direction of the Agent and at
the  Borrower's  risk  and  expense.  Unless  invested  in  accordance  with the
preceding sentence, such deposits shall not bear interest.  Interest or profits,
if any, on such  investments  shall  accumulate in such account.  Monies in such
account shall be applied by the Agent to reimburse the Issuing Bank for drawings
for which it has not been reimbursed and, to the extent not so applied, shall be
held for the satisfaction of the  reimbursement  obligations of the Borrower for
the undrawn  Letters of Credit at such time or, if the maturity of the Loans has
been  accelerated  (but  subject to the  consent of the  Required  Lenders),  be
applied to satisfy other  obligations of the Borrower under this  Agreement.  If
the Borrower is required to provide an amount of cash collateral  hereunder as a
result of the occurrence of an Event of Default,  such amount (to the extent not
applied  as  aforesaid)  shall be  returned  to the  Borrower  within  three (3)
Business Days after all Events of Default have been cured or waived.

                  (n) The  Issuing  Bank may be  replaced at any time by written
agreement  among the  Borrower,  the Agent,  the  replaced  Issuing Bank and the
successor  Issuing  Bank,  PROVIDED  that the  successor  Issuing Bank must be a
Lender or an  Affiliate  of a Lender.  The Agent shall notify the Lenders of any
such  replacement  of an Issuing  Bank. At the time any such  replacement  shall
become effective, the Borrower shall pay all unpaid fees accrued for the account
of the replaced  Issuing Bank  pursuant to Section 2. 11(b).  From and after the
effective date of any such replacement (i) the successor Issuing Bank shall have
all the rights and  obligations  of an Issuing  Bank under this  Agreement  with
respect to Letters of Credit to be issued by it thereafter  and (ii)  references
herein to the term  "Issuing  Bank"  shall be deemed to refer to such  successor
Issuing Bank,  any other Issuing Bank, or any previous  Issuing Bank, or to such
successor  Issuing Bank, all other Issuing Banks and all previous Issuing Banks,
as  the  context  shall  require.  After  the  replacement  of an  Issuing  Bank
hereunder,  the  replaced  Issuing  Bank shall  remain a party  hereto and shall
continue to have all the rights and  obligations  of an Issuing  Bank under this
Agreement  with  respect  to  Letters  of  Credit  issued  by it  prior  to such
replacement, but shall not be required to issue additional Letters of Credit.

         Section 2.12   PAYMENTS AND COMPUTATIONS.

                  (a) Each payment  hereunder  and under the Notes shall be made
not later than 12:00  (noon),  Eastern  Time, on the day when due, in federal or
other immediately available funds, without setoff, deduction or counterclaim, by
payment of such funds to the Agent's  Account for the account of the  Applicable
Lending  Office of each Lender.  Amounts  received  after 12:00 (noon),  Eastern
Time, on any day shall be deemed received on the next  succeeding  Business Day.
With  respect to any such payment  received for the account of the Lenders,  the
Agent will  promptly  thereafter  cause to be wire  transferred  ratably to each
Lender like funds for the account of its Applicable Lending Office in the amount
thereof on the day such funds are deemed  received  by the Agent.  Whenever  any
payment to be made under this Agreement or any Note shall be stated to be due on
a day  other  than a  Business  Day,  such  payment  shall  be made on the  next
succeeding  Business  Day and  such  extension  of time  shall  in such  case be
included in the computation of interest, except that in the case of a Eurodollar
Loan, if the next  succeeding  Business Day is in the following  calendar month,
such payment shall be made on the next preceding Business Day.



                                       34
<PAGE>

                  (b) If at any time funds are received by and  available to the
Agent which are not  sufficient to pay fully all amounts of principal,  interest
and fees then due  hereunder,  such  funds  shall be applied  (i) first,  to pay
interest and fees then due hereunder, ratably among the parties entitled thereto
in  accordance  with the amounts of interest and fees then due to such  parties,
and (ii) second, to pay principal then due hereunder,  ratably among the parties
entitled  thereto in accordance  with the amounts of principal  then due to such
parties.

                  (c)  Unless  the Agent  shall have  received  notice  from the
Borrower  prior to the date on which  any  payment  is due to the  Agent for the
account of the Lenders  hereunder  that the Borrower will not make such payment,
the Agent may assume  that the  Borrower  has made such  payment on such date in
accordance herewith and may, in reliance upon such assumption, distribute to the
Lenders,  the amount due. In such event,  if the  Borrower  has not in fact made
such payment,  then each of the Lenders  severally  agrees to repay to the Agent
forthwith  on demand the amount so  distributed  to such  Lender  with  interest
thereon,  for each day from and including the date such amount is distributed to
it to but excluding the date of payment to the Agent, at the Federal Funds Rate.

                  (d) If any Lender  shall fail to make any payment  required to
be  made  by  it  under  this  Agreement,  the  Agent  may,  in  its  discretion
(notwithstanding  any contrary provision  hereof),  apply any amounts thereafter
received by the Agent for the account of such  Lender to satisfy  such  Lender's
obligations  under this Agreement  until all such  unsatisfied  obligations  are
fully paid.

         Section 2.13 EXTENSION OF REVOLVING  COMMITMENT  TERMINATION  DATE. The
Revolving  Commitment  Termination  Date may be  automatically  extended  for an
additional  term of one (1) year on each of the first and second  anniversary of
the Closing Date, if the Borrower  shall have given written  notice to the Agent
in the form of EXHIBIT L attached hereto not less than ninety (90) days prior to
the  Revolving  Commitment  Termination  Date then in effect,  that the Borrower
desires  to extend the  Revolving  Commitment  Termination  Date (each such with
notice being called a "Request for Extension"). The Agent shall promptly provide
each Lender  with a copy of each such  Request for  Extension  and confirm  each
Lender's receipt  thereof.  Each Lender may elect either to extend or not extend
the  Revolving  Commitment  Termination  Date with  respect to the amount of its
Revolving Commitment Percentage in its sole discretion,  notwithstanding that no
Event of Default  exists under this Agreement or the Notes and regardless of the
adequacy of the  Collateral for the  Borrower's  performance of its  obligations
hereunder  and  thereunder.  In the event any  Lender  elects  not to extend the
Revolving Commitment Termination Date (a "Withdrawing Lender"), such Withdrawing
Lender shall within  thirty (30) days of its receipt of a Request for  Extension
give the Agent  written  notice of its  decision  not to  extend  the  Revolving
Commitment  Termination  Date  with  respect  to the  amount  of  its  Revolving
Commitment  Percentage in the Revolving Loan (a "Notice of  Non-Extension").  In
the event the Agent does not receive a Notice of Non-Extension  from a Lender on
or before the date which is thirty (30) days,  after such Lender's  receipt of a
Request for Extension,  the Agent may conclusively conclude that such Lender has
elected to extend the Revolving  Commitment  Termination  Date for an additional



                                       35
<PAGE>

one (1) year period.  In the event the Agent receives a Notice of  Non-Extension
from a Withdrawing  Lender on or before the date which is thirty (30) days after
such Lender's receipt of a Request for Extension, (except as otherwise set forth
herein) the Aggregate  Revolving  Commitment shall from and after such Revolving
Termination Date be reduced by the amount of such Lender's Revolving Commitment.
In the event the Agent receives Notice of Non-Extension from Withdrawing Lenders
which under this  Agreement  have more than fifty percent (50%) of the Aggregate
Revolving Commitment,  then the Revolving Commitment  Termination Date shall not
be extended.  The Agent will  promptly  notify each Lender after  receipt of any
Notice of Non-Extension.  Those Lenders other than the Withdrawing  Lenders (the
"Remaining  Lenders")  shall  each have the right to  purchase  the  Withdrawing
Lender's Revolving Commitment Percentage on a pro-rata basis by giving the Agent
written  Notice of such  Remaining  Lender's  election  to do so, not later than
thirty  (30) days  after  receipt  of notice  from the  Agent.  In the event the
Remaining Lenders elect to purchase less than the Withdrawal  Lender's Revolving
Commitment  Percentage,  the Borrower may attempt to locate additional financial
institutions which would qualify as Eligible Assignees under this Agreement.  To
the extent that any Lender's Revolving Commitment  Percentage changes which as a
result of any election made pursuant to this Section, the Borrower will promptly
upon request of Agent execute and deliver to such Lender or Lenders, as the case
may be,  a  Replacement  Revolving  Credit  Note,  and such  other  instruments,
agreements or documents as the Agent may than request.

In the event the Withdrawing  Lender's  Revolving  Commitment  Percentage is not
purchased by a remaining Lender or an Eligible  Assignee as provided for herein,
the Borrower shall on the Revolving  Commitment  Termination Date make a payment
in an amount sufficient to repay the Withdrawing Lender's share of the Revolving
Commitment,  which payment shall (notwithstanding the provisions of Section 2.12
of this  Agreement)  be  distributed  by the  Agent to the  Withdrawing  Lender,
provided at the time of such payment no Event of Default shall have occurred and
be continuing under this Agreement.

         Section 2.14 THE CONCEPTRONIC DISPOSITION. The Borrower may, subject to
the terms of this Agreement,  upon not less than thirty (30) days' prior written
notice to the Agent, proceed with the Conceptronic  Disposition,  if at the time
of the Conceptronic  Disposition and immediately  after giving effect hereto, no
Default or Event of Default  shall have occurred  hereunder.  From and after the
date  of the  Conceptronic  Disposition,  (x)  the  calculation  of the  Minimum
Compliance Level shall be reduced as set forth in Section 1.1 hereof and (y) the
Conceptronic Disposition shall be treated for purposes of GAAP as a dividend and
will be excluded from the  calculation of the Fixed Charge  Coverage Ratio under
Section 6.10(c) hereof.

                                    ARTICLE 3
                             CHANGE IN CIRCUMSTANCES
                             -----------------------

         Section 3.1  INCREASED COST AND REDUCED RETURN.

                  (a) If, after the date hereof,  the adoption of any applicable
law,  rule,  or  regulation,  or any  change in any  applicable  law,  rule,  or



                                       36
<PAGE>

regulation, or any change in the interpretation or administration thereof by any
governmental  authority,  central bank, or  comparable  agency  charged with the
interpretation  or administration  thereof,  or compliance by any Lender (or its
Applicable  Lending  Office) or the Issuing  Bank with any request or  directive
(whether  or not  having the force of law) of any such  governmental  authority,
central bank, or comparable agency:

                           (i) shall  subject  such  Lender  (or its  Applicable
Lending  Office) or the  Issuing  Bank to any tax,  duty,  or other  charge with
respect  to any  Eurodollar  Loan,  its  Note(s),  any  Letter  of Credit or any
participation  therein or its  obligation to make  Eurodollar  Loans or to issue
Letters of Credit,  or change the basis of taxation  of any  amounts  payable to
such Lender (or its  Applicable  Lending  Office) or the Issuing Bank under this
Agreement or its Notes in respect of any  Eurodollar  Loan,  Letter of Credit or
participations  therein  (other than Taxes  imposed on the overall Net Income of
such Lender or the Issuing Bank by the jurisdiction in which such Lender or such
Issuing Bank has its principal office or such Applicable Lending Office);

                           (ii) shall impose,  modify,  or deem  applicable  any
reserve,  special deposit,  assessment,  compulsory loan, or similar requirement
(other  than  the  Reserve  Requirement  utilized  in the  determination  of the
Adjusted  Eurodollar  Rate) relating to any extensions of credit or other assets
of, or any deposits with or other liabilities or commitments of, such Lender (or
its Applicable Lending Office) or the Issuing Bank,  including the Commitment of
the Lender or such Issuing Bank hereunder; or

                           (iii) shall impose on such Lender (or its  Applicable
Lending  Office)  or  the  Issuing  Bank  or on the  United  States  market  for
certificates  of  deposit  or the London  interbank  market any other  condition
affecting  this  Agreement or its Notes or any of such  extensions  of credit or
liabilities or commitments;

and the result of any of the  foregoing  is to increase  the cost to such Lender
(or its Applicable  Lending  Office) or such Issuing Bank of making,  Converting
into, Continuing,  or maintaining any Eurodollar Loan or to increase the cost of
such Lender or the Issuing Bank of  participating  in issuing or maintaining any
Letter of Credit or to reduce any sum received or  receivable by such Lender (or
its Applicable  Lending  Office) or the Issuing Bank under this Agreement or its
Notes with  respect  to any  Eurodollar  Loan or any Letter of Credit,  then the
Borrower  shall pay to such Lender or the Issuing  Bank on demand such amount or
amounts as will  compensate  such Lender or the Issuing Bank for such  increased
cost or reduction.  If any Lender or the Issuing Bank requests  compensation  by
the  Borrower  under this  Section  3.1(a) the  Borrower  may, by notice to such
Lender or the Issuing Bank (with a copy to the Agent), suspend the obligation of
such Lender or the  Issuing  Bank to make or Continue  Eurodollar  Loans,  or to
Convert Base Rate Loans into  Eurodollar  Loans,  or to issue  Letters of Credit
until the event or condition  giving rise to such request ceases to be in effect
(in which case the provisions of Section 3.4 shall be applicable); PROVIDED that
such  suspension  shall not  affect  the right of such  Lender  to  receive  the
compensation so requested.

                  (b) If, after the date hereof,  any Lender or the Issuing Bank
shall  have  determined  that the  adoption  of any  applicable  law,  rule,  or
regulation   regarding  capital  adequacy  or  any  change  therein  or  in  the



                                       37
<PAGE>

interpretation or administration thereof by any governmental authority,  central
bank, or comparable  agency charged with the  interpretation  or  administration
thereof,  or any request or directive regarding capital adequacy (whether or not
having the force of law) of any such  governmental  authority,  central bank, or
comparable  agency,  has or would have the effect of reducing the rate of return
on the capital of such Lender or the Issuing Bank or any corporation controlling
such Lender or the Issuing Bank as a  consequence  of such Lender or the Issuing
Bank's  obligations  hereunder to a level below that which such  Lender's or the
Issuing Bank or such  corporation  could have  achieved  but for such  adoption,
change,  request,  or directive  (taking into  consideration  its policies  with
respect to capital  adequacy),  then from time to time upon demand the  Borrower
shall pay to such Lender or the Issuing Bank such  additional  amount or amounts
as will compensate such Lender or the Issuing Bank for such reduction.


                  (c)   Each Lender and the  Issuing  Bank shall  promptly
notify  the  Borrower  and the  Agent of any  event  of which it has  knowledge,
occurring  after the date hereof,  which will entitle such Lender or the Issuing
Bank,  as the case may be, to  compensation  pursuant  to this  Section and will
designate a different  Applicable  Lending Office if such designation will avoid
the need for,  or reduce the amount of, such  compensation  and will not, in the
judgment of such Lender or the Issuing Bank, be otherwise disadvantageous to it.
Any Lender or the Issuing Bank  claiming  compensation  under this Section shall
furnish to the Borrower and the Agent a statement  setting forth the calculation
of the additional  amount or amounts to be paid to it hereunder  which statement
shall be  conclusive  in the  absence of manifest  error.  In  determining  such
amount,  such Lender or the Issuing Bank may use any  reasonable  averaging  and
attribution methods.

         Section 3.2  LIMITATION ON TYPES OF LOANS.  If on or prior to the first
day of any Interest Period for any Eurodollar Loan:

                  (a)  the  Agent  determines  (which   determination  shall  be
conclusive)  that by reason of  circumstances  affecting  the  relevant  market,
adequate and reasonable  means do not exist for ascertaining the Eurodollar Rate
for such Interest Period; or

                  (b) the Required Lenders determine (which  determination shall
be conclusive)  and notify the Agent that the Adjusted  Eurodollar Rate will not
adequately  and fairly  reflect  the cost to the  Lenders of funding  Eurodollar
Loans for such Interest  Period,  then the Agent shall give the Borrower  prompt
notice thereof  specifying the relevant amounts or periods,  and so long as such
condition  remains in effect,  the Lenders  shall be under no obligation to make
additional  Eurodollar Loans, Continue Eurodollar Loans, or to Convert Base Rate
Loans into Eurodollar  Loans,  and the Borrower shall, on the last day(s) of the
then current Interest  Period(s) for the outstanding  Eurodollar  Loans,  either
prepay such Loans or Convert such Loans into Base Rate Loans in accordance  with
the terms of this Agreement.

         Section 3.3  ILLEGALITY.  Notwithstanding  any other  provision of this
Agreement,  in the  event  that  it  becomes  unlawful  for  any  Lender  or its
Applicable Lending Office to make, maintain, or fund Eurodollar Loans, then such
Lender shall promptly notify the Borrower thereof,  and such Lender's obligation



                                       38
<PAGE>

to make or Continue  Eurodollar  Loans and to Convert Base Rate into  Eurodollar
Loans  shall be  suspended  until  such  time as such  Lender  may  again  make,
maintain, and fund Eurodollar Loans (in which case the provisions of Section 3.4
shall be applicable). In the event that it becomes unlawful for the Issuing Bank
to issue  Letters of Credit  hereunder,  then the  Issuing  Bank shall  promptly
notify the Borrower thereof,  and the Issuing Bank's obligation to issue Letters
of Credit shall be suspended until such time as the Issuing Bank may again issue
Letters of Credit.

         Section 3.4  TREATMENT  OF AFFECTED  LOANS.  If the  obligation  of any
Lender to make a Eurodollar  Loan or to Continue,  or to Convert Base Rate Loans
into Eurodollar  Loans shall be suspended  pursuant to Section 3.1 or 3.3 hereof
such Lender's  Eurodollar Loans shall be automatically  Converted into Base Rate
Loans on the last day(s) of the then current  Interest  Period(s) for Eurodollar
Loans (or, in the case of a Conversion  required by Section 3.3 hereof,  on such
earlier  date as such  Lender  may  specify to the  Borrower  with a copy to the
Agent) and, unless and until such Lender gives notice as provided below that the
circumstances  specified  in Section  3.1 or 3.3  hereof  that gave rise to such
Conversion no longer exist:

                  (a) to the extent  that such  Lender's  Eurodollar  Loans have
been so  Converted,  all  payments  and  prepayments  of  principal  that  would
otherwise be applied to such Lender's  Eurodollar Loans shall be applied instead
to its Base Rate Loans; and

                  (b) all Loans that would  otherwise  be made or  Continued  by
such Lender as Eurodollar Loans shall be made or Continued  instead as Base Rate
Loans,  and all Base Rate Loans of such Lender that would otherwise be Converted
into Eurodollar Loans shall remain as Base Rate Loans.

If such Lender gives notice to the Borrower  (with a copy to the Agent) that the
circumstances  specified  in  Section  3.1 or 3.3  hereof  that gave rise to the
Conversion of such  Lender's  Eurodollar  Loans  pursuant to this Section 3.4 no
longer exist (which such Lender  agrees to do promptly  upon such  circumstances
ceasing  to exist) at a time when  Eurodollar  Loans made by other  Lenders  are
outstanding,  such Lender's Base Rate Loans shall be automatically Converted, on
the first day(s) of the next succeeding  Interest Period(s) for such outstanding
Eurodollar  Loans, to the extent necessary so that, after giving effect thereto,
all  Loans  held by each of the  Lenders  are held  pro  rata  (as to  principal
amounts,  Types,  and  Interest  Periods) in  accordance  with their  respective
Revolving Commitments.

         Section 3.5 COMPENSATION.  Upon the request of any Lender, the Borrower
shall pay to such Lender such amount or amounts as shall be  sufficient  (in the
reasonable  opinion of such  Lender) to  compensate  it for any loss,  cost,  or
expense (including loss of anticipated profits) incurred by it as a result of:

                  (a) any payment,  prepayment,  or  Conversion  of a Eurodollar
Loan for any reason  (including,  without  limitation,  the  acceleration of the
maturity of the Loans pursuant to Section 8.2) on a date other than the last day
of the Interest Period for such Loan; or



                                       39
<PAGE>

                  (b) any  failure by the  Borrower  for any reason  (including,
without limitation,  the failure of any condition precedent specified in Article
5 to be satisfied) to borrow, Convert,  Continue, or prepay a Eurodollar Loan on
the date for such borrowing,  Conversion,  Continuation, or prepayment specified
in the relevant  notice of borrowing,  prepayment,  Continuation,  or Conversion
under this Agreement.

         Section 3.6  TAXES.

                  (a) Any and all payments by the Borrower to or for the account
of any Lender,  the Issuing Bank or the Agent  hereunder or under any other Loan
Document  shall be made free and clear of and without  deduction for any and all
present  or future  taxes,  duties,  levies,  imposts,  deductions,  charges  or
withholdings,  and all liabilities with respect thereto,  EXCLUDING, in the case
of each Lender, the Issuing Bank and the Agent, taxes imposed on its income, and
franchise taxes imposed on it, by the jurisdiction  under the laws of which such
Lender (or its Applicable  Lending  Office) or the Issuing Bank or the Agent (as
the case may be) is organized  or any  political  subdivision  thereof (all such
non-excluded taxes, duties, levies, imposts, deductions,  charges, withholdings,
and liabilities being hereinafter  referred to as "Non-Excluded  Taxes"). If the
Borrower  shall be required by law to deduct any Taxes from or in respect of any
sum payable under this  Agreement or any other Loan Document to any Lender,  the
Issuing Bank or the Agent,  (i) the sum payable  shall be increased as necessary
so that after making all required deductions (including deductions applicable to
additional sums payable under this Section 3.6),  such Lender,  the Issuing Bank
or the Agent  receives an amount equal to the sum it would have  received had no
such deductions been made, (ii) the Borrower shall make such  deductions,  (iii)
the  Borrower  shall  pay the full  amount  deducted  to the  relevant  taxation
authority or other  authority in accordance  with  applicable  law, and (iv) the
Borrower shall furnish to the Agent, at its address referred to in Section 11.7,
the original or a certified copy of a receipt evidencing payment thereof.

                  (b) In  addition,  the  Borrower  agrees  to pay  any  and all
present or future  stamp or  documentary  taxes and any other excise or property
taxes or charges or similar  levies which arise from any payment made under this
Agreement  or any other Loan  Document or from the  execution or delivery of, or
otherwise   with  respect  to,  this   Agreement  or  any  other  Loan  Document
(hereinafter referred to as "Other Taxes").

                  (c) The Borrower agrees to indemnify each Lender,  the Issuing
Bank and the Agent for the full  amount  of Taxes  and Other  Taxes  (including,
without  limitation,  any  Taxes or  Other  Taxes  imposed  or  asserted  by any
jurisdiction on amounts payable under this Section 3.6) paid by such Lender, the
Issuing  Bank or the  Agent  (as the case may be) and any  liability  (including
penalties, interest, and expenses) arising therefrom or with respect thereto.

                  (d) Each  Lender  organized  under the laws of a  jurisdiction
outside the United States, on or prior to the date of its execution and delivery
of this  Agreement  in the case of each  Lender  listed on the  signature  pages
hereof  and on or prior to the date on which it  becomes a Lender in the case of
each other Lender,  and from time to time  thereafter if requested in writing by
the Borrower or the Agent (but only so long as such Lender remains lawfully able
to do so),  shall  provide the Borrower and the Agent with (i) Internal  Revenue



                                       40
<PAGE>

Service Form 1001 or 4224, as  appropriate,  or any successor form prescribed by
the  Internal  Revenue  Service,  certifying  that such  Lender is  entitled  to
benefits  under an income tax treaty to which the United States is a party which
reduces the rate of withholding  tax on payments of interest or certifying  that
the income receivable  pursuant to this Agreement is effectively  connected with
the conduct of a trade or business in the United States,  (ii) Internal  Revenue
Service Form W-8 or W-9, as appropriate, or any successor form prescribed by the
Internal  Revenue Service,  and (iii) any other form or certificate  required by
any taxing authority  (including any certificate required by Sections 871(h) and
881(c) of the Internal Revenue Code), certifying that such Lender is entitled to
an  exemption  from  or a  reduced  rate  of tax on  payments  pursuant  to this
Agreement or any of the other Loan Documents.

                  (e) For any period  with  respect to which a Lender has failed
to provide the  Borrower  and the Agent with the  appropriate  form  pursuant to
Section  3.6(d)  (unless  such  failure  is due to a change in treaty,  law,  or
regulation  occurring  subsequent  to the  date on which a form  originally  was
required to be provided),  such Lender shall not be entitled to  indemnification
under  Section  3.6(a) or 3.6(b)  with  respect  to Taxes  imposed by the United
States; PROVIDED,  HOWEVER, that should a Lender, which is otherwise exempt from
or subject to a reduced rate of withholding tax, become subject to Taxes because
of its failure to deliver a form  required  hereunder,  the Borrower  shall take
such steps as such  Lender  shall  reasonably  request to assist  such Lender to
recover such Taxes.

                  (f) If the Borrower is required to pay  additional  amounts to
or for the account of any Lender  pursuant to this Section 3.6, then such Lender
will  agree  to  use  reasonable  efforts  to  change  the  jurisdiction  of its
Applicable  Lending  Office so as to  eliminate  or reduce  any such  additional
payment  which may  thereafter  accrue if such  change,  in the judgment of such
Lender, is not otherwise disadvantageous to such Lender.

                  (g) Within  thirty  (30) days after the date of any payment of
Taxes,  the Borrower shall furnish to the Agent the original or a certified copy
of a receipt evidencing such payment.

                  (h) Without  prejudice to the survival of any other  agreement
of the  Borrower  hereunder,  the  agreements  and  obligations  of the Borrower
contained in this Section 3.6 shall survive the  termination of the  Commitments
and the payment in full of the Notes.

         Section 3.7  SUBSTITUTION OF LENDER. If any Lender requests  additional
compensation  under the provisions of Article 3 or shall notify the Agent or the
Borrower pursuant to Article 3 that it is unlawful or impossible for such Lender
to make,  maintain or fund a Eurodollar  Loan, the Borrower may upon the payment
of the amount to which such Lender is entitled  terminate the Commitment of such
Lender  and,  with the  approval  of the  Agent,  which  approval  shall  not be
unreasonably withheld, substitute for such Lender another lender or lenders. Any
lender which becomes a "Lender"  pursuant to the  provisions of this Section 3.7
shall  become  a party  to this  Agreement  by  executing  such  instruments  or
agreements  as may be  satisfactory  to the Agent and the Borrower  including an
Assignment  and  Acceptance  pursuant to Section  11.3,  and the Borrower  shall
execute and deliver to such  Lender  applicable  Notes dated as of the date such
lender becomes a Lender.



                                       41
<PAGE>


                                    ARTICLE 4
                         REPRESENTATIONS AND WARRANTIES
                         ------------------------------

         The  Borrower  represents  and warrants to the Agent and to the Lenders
(which  representations  and warranties shall survive the execution and delivery
of the Notes and the making of the Loans) that:

         Section 4.1  SUBSIDIARIES.  The Subsidiaries as of the Closing Date are
listed on the  attached  SCHEDULE  4.1.  Each  Subsidiary  listed  thereon  is a
Consolidated Subsidiary.

         Section 4.2 GOOD STANDING. Each of the Borrower and its Subsidiaries is
a  corporation  organized  and existing in good  standing  under the laws of the
jurisdiction  of its  respective  incorporation,  and each  corporation  has the
corporate  power to own its  property  and to carry on its business as now being
conducted  and is duly  qualified to do business and is in good standing in each
jurisdiction in which the character of the properties  owned by it therein or in
which the transaction of its business makes such qualification  necessary and in
which the failure so to qualify would have a Materially Adverse Effect.

         Section  4.3  CORPORATE  AUTHORITY.  The  Borrower  has full  power and
authority to enter into this  Agreement,  to make the borrowings  hereunder,  to
execute and deliver the Notes and to incur the  obligations  provided for herein
and therein,  all of which have been duly authorized by all proper and necessary
corporate  action. No consent or approval of shareholders or consent or approval
of,  notice to or filing  with,  any  Governmental  Authority  is  required as a
condition to the validity of this Agreement, the Notes, any Collateral Document,
or any of the applications for Letters of Credit.

         Section  4.4  BINDING  AGREEMENTS.  This  Agreement  and the other Loan
Documents  constitute the valid and binding  agreements of the Borrower and each
Subsidiary party thereto,  and the Notes and applications for Letters of Credit,
when issued and delivered  pursuant  hereto for value,  received will constitute
the valid and binding  obligations of the Borrower,  in each case enforceable in
accordance with their respective terms.

         Section 4.5  LITIGATION.  Except as disclosed on the attached  SCHEDULE
4.5 or in the Annual  Report of the  Borrower  on Form 10-K for the fiscal  year
ended  December 31,  1997,  a copy of which has been  delivered to the Agent and
each of the Lenders, there are no proceedings pending or, so far as the officers
of the Borrower know, threatened before any court or administrative agency that,
in the opinion of the officers of the Borrower,  will have a Materially  Adverse
Effect.

         Section 4.6 NO CONFLICTING  AGREEMENTS.  There is no charter,  bylaw or
preference  stock  provision of the Borrower or any of its  Subsidiaries  and no
provision of any existing  mortgage,  indenture,  Material Contract or agreement
binding on the Borrower or any of its Subsidiaries or affecting their respective
properties,  that  would  conflict  with or in any way  prevent  the  execution,



                                       42
<PAGE>

delivery,  or carrying out of the terms of this Agreement,  the Notes, or any of
the applications for Letters of Credit, or any of the other Loan Documents..


         Section 4.7  FINANCIAL CONDITION.

                  (a) AUDITED STATEMENT.  The consolidated  balance sheet of the
Borrower  and  its  Subsidiaries  as of  December  31,  1997,  and  the  related
consolidated  statements  of income,  changes in  shareholders'  equity and cash
flows for the period then ended,  certified by KPMG LLP, heretofore delivered to
the Agent and each of the Lenders,  fairly present in all material  respects the
consolidated   financial   condition  of  the  Borrower  and  its   Consolidated
Subsidiaries and the consolidated results of operations and cash flows as of the
date  and for the  periods  referred  to  therein  and  have  been  prepared  in
accordance  with GAAP.  There are no liabilities,  direct or indirect,  fixed or
contingent,  of the Borrower or any of its  Consolidated  Subsidiaries as of the
date of such balance  sheet which are  material  (in  relation to the  financial
condition or operations of the Borrower and its Consolidated  Subsidiaries) that
are not  reflected  therein or in the notes  thereto.  There has been no adverse
change in the  financial  condition or  operations of the Borrower or any of its
Consolidated  Subsidiaries  since the date of such balance sheet,  and there has
been no other adverse change in the Borrower, which is, in either case, material
(in relation to the  financial  condition or  operations of the Borrower and its
Consolidated Subsidiaries).

                  (b) UNAUDITED  STATEMENT.  The unaudited  consolidated balance
sheet of the  Borrower and its  Consolidated  Subsidiaries  as of September  30,
1998, and the related unaudited consolidated statement of income for the quarter
then ended,  heretofore  delivered to the Agent and each of the Lenders,  fairly
present in all material  respects the  consolidated  financial  condition of the
Borrower  and its  Consolidated  Subsidiaries  and the  consolidated  results of
operations  as of the date and for the period  referred to therein and have been
prepared in accordance with GAAP, subject to year-end adjustments.




                                       43
<PAGE>

         Section 4.8  ERISA. The Borrower and each ERISA  Affiliate  and each of
their respective  Employee Plans are in compliance in all material respects with
ERISA and the Code, and neither the Borrower nor any of its ERISA Affiliates has
incurred  any  "accumulated  funding  deficiency"  with respect to any such Plan
within the meaning of Section  402(a) of ERISA or Section  412 of the Code.  The
Borrower and each of its ERISA Affiliates have complied with all requirements of
ERISA Sections 601 through 608 and Code Section 4980B.  Neither the Borrower nor
any of its  ERISA  Affiliates  have made any  promises  of  retirement  or other
benefits  to  employees,  except as set forth in an Employee  Plan.  Neither the
Borrower nor any of its ERISA Affiliates has incurred any material  liability to
PBGC in  connection  with any Employee  Plan.  The assets of each  Employee Plan
which is subject to Title IV of ERISA are  sufficient  to provide  the  benefits
under such  Employee  Plan,  payment of which the PBGC would  guarantee  if such
Employee Plan were  terminated,  and such assets are also  sufficient to provide
all other "benefit  liabilities"  (as defined in ERISA Section  4001(a)(16)) due
under such Employee Plan upon termination.  No Reportable Event has occurred and
is continuing  with respect to any such Employee Plan. No Employee Plan or trust
created thereunder, or party in interest (as defined in Section 4(14) of ERISA),
or any  fiduciary  (as  defined in Section  4(21) of  ERISA),  has  engaged in a
Prohibited  Transaction  which would  subject  such  Employee  Plan or any other
Employee Plan of the Borrower or any of its ERISA Affiliates,  any trust created
thereunder,  or any such party in interest or  fiduciary,  or any party  dealing
with  any  such  Employee  Plan  or any  such  trust  to the tax or  penalty  on
"prohibited transactions" imposed by Section 502 of ERISA or Section 4975 of the
Code.

         Section  4.9  TAXES. The  Borrower  and each of its  Subsidiaries  have
timely filed or caused to be timely  filed all tax returns and reports  required
to be filed by any of them in any jurisdiction,  and all taxes upon the Borrower
and its Subsidiaries and upon their respective  properties,  assets,  income and
franchises  which are due and payable have been paid when due and  payable.  The
charges, accruals and reserves on the books of the Borrower and its Consolidated
Subsidiaries  with  respect  to taxes  are,  in the  reasonable  opinion  of the
Borrower,  adequate under GAAP. No examination or audit of any tax return of the
Borrower or any of its Subsidiaries is currently in progress.

         Section 4.10 OWNERSHIP OF PROPERTY: LIENS. Each of the Borrower and its
Subsidiaries  has good and  marketable  and legal  title in fee  simple  (or its
equivalent  under applicable law) to all of the real property and has good title
to all the other  properties  and assets it  purports  to own,  including  those
referred to in the  financial  statements  described in Section 4.7,  except for
defects in title which  could not  reasonably  be expected to have a  Materially
Adverse Effect.  Except as permitted by this Agreement,  all such properties and
assets are free and clear of Liens.  Each of the Borrower  and its  Subsidiaries
enjoys full,  peaceful and undisturbed  possession under all leases necessary in
any material respect for the operation of its respective  properties and assets,
none of  which  contains  any  unusual  or  burdensome  provisions  which  might
materially affect or impair the operation of such properties or assets. All such
leases are valid and subsisting  and are in full force and effect,  and no event
has occurred and no  circumstance  exists which with the lapse of time or giving
of notice or both would constitute a default thereunder.



                                       44
<PAGE>

         Section  4.11  NO  VIOLATIONS.  Neither  the  Borrower  nor  any of its
Subsidiaries is in violation of its organizational documents,  by-laws, or other
governing  instruments.  Each  of  the  Borrower  and  its  Subsidiaries  is  in
compliance  with all laws  applicable  to it, and all orders and  decrees of all
courts and  arbitrators  in  proceedings or actions to which it is a party or by
which it is bound,  where  failure  to comply  would have a  Materially  Adverse
Effect.  Neither the Borrower nor any of its  Subsidiaries  is in default in the
performance  of any  obligation,  agreement or condition  contained in any bond,
debenture or note, or in any indenture,  loan  agreement,  Material  Contract or
other agreement, which default could reasonably be expected to have a Materially
Adverse Effect. The execution,  delivery and performance by the Borrower of this
Agreement  and the other Loan  Documents  to which it is a party do not and will
not (i) require any  consent or  approval of the  shareholders  or owners of the
Borrower; (ii) violate any provision of any law (including,  without limitation,
Regulation G, T, U or X of the Board of Governors of the Federal Reserve System)
presently  in  effect  having  applicability  to  the  Borrower  or  any  of its
Subsidiaries  or any  provision  of their  respective  organizational  papers or
by-laws; (iii) violate,  conflict or be inconsistent with, or result in a breach
of, or constitute a default under, or cause the termination or acceleration  of,
the  organizational  documents  or  by-laws  of  the  Borrower  or  any  of  its
Subsidiaries  or any  indenture  or  loan  or  credit  agreement  or  any  other
agreement,  lease or instrument to which the Borrower or any of its Subsidiaries
is a party or by which it or its  properties  may be bound or affected;  or (iv)
result in, or  require,  the  creation  or  imposition  of a Lien,  upon or with
respect to any properties now owned or hereafter acquired by the Borrower or any
of its Subsidiaries, except as permitted by this Agreement.

         Section 4.12  PATENTS, TRADEMARKS, FRANCHISES, ETC.   As of the Closing
Date, the Borrower and its Subsidiaries have no patents,  trademarks,  trademark
rights,  service marks, trade names, trade name rights,  copyrights,  franchises
and licenses,  other than those belonging to Conceptronic and listed on SCHEDULE
4.12.  The  Borrower  will  promptly  notify  the  Agent in the event it, or any
Subsidiary,  obtains any such  intellectual  property after the Closing Date and
thereafter  properly  execute and deliver and cause its  Subsidiaries to execute
and  deliver,  to  Agent  an  Intellectual   Property  Agreement  covering  such
intellectual property.

         Section 4.13  COMPLIANCE WITH LAWS;  ENVIRONMENTAL  AND SAFETY MATTERS.
Each of the Borrower and its  Subsidiaries is in compliance in all respects with
all applicable laws,  including but not limited to, all  Environmental  Laws and
laws relating to occupational safety or health, the failure to comply with which
could reasonably be expected to have a Materially  Adverse Effect.  There are no
past  or  present  events,  conditions,  circumstances,  activities,  practices,
incidents, actions or plans which reasonably could be expected to interfere with
or prevent  continued  compliance with, or which reasonably could be expected to
give rise to any common law or  statutory  liability,  under,  relating to or in
connection  with,  any  Environmental  Law, or  otherwise  form the basis of any
claim, action, suit,  proceeding,  hearing or investigation under applicable law
based  on  or  related  to  the  manufacture,   processing,  distribution,  use,
treatment,  storage, transport or handling, or the release or threatened release
into the environment,  of any Hazardous Material with respect to the Borrower or
any of its Subsidiaries or their respective businesses which could reasonably be
expected to have a Materially Adverse Effect.



                                       45
<PAGE>

         Section 4.14  NO MATERIAL  MISSTATEMENT.  All information,  reports and
other papers and data with  respect to the  Borrower or any of its  Subsidiaries
furnished  to the  Agent or to any  Lender  were,  at the time the same  were so
furnished,  complete  and  correct  in  all  material  respects,  or  have  been
subsequently supplemented by other information,  reports or other papers or data
to the extent  necessary  to give the Agent or such  Lender a true and  accurate
knowledge  of the  subject  matter in all  material  respects.  No  information,
report,  financial statement,  exhibit, or schedule furnished by or on behalf of
the Borrower in connection  with the  negotiation,  preparation  or execution of
this Agreement or any of the other Loan Documents or included  therein  contains
any material misstatement of fact or omitted or omits to state any material fact
necessary to make the statements  therein not  misleading.  No fact is currently
known to the Borrower  which could  reasonably  be expected to have a Materially
Adverse Effect.

         Section 4.15  INVESTMENT  COMPANY ACT;  PUBLIC UTILITY  HOLDING COMPANY
ACT;  FEDERAL  POWER ACT.  Neither the Borrower nor any of its  Subsidiaries  is
required to register under the provisions of the Investment Company Act of 1940,
as amended,  or is a "holding  company" or a "subsidiary  company" of a "holding
company" or of a "subsidiary company" of a "holding company",  as such terms are
defined in the Public  Utility  Holding  Company Act of 1935,  as amended,  or a
"public utility", as such term is defined in the Federal Power Act, as amended.

         Section 4.16  INDEBTEDNESS.   Except as  permitted  under  Section 7.1,
neither the Borrower nor any of its Subsidiaries has any outstanding Debt.

         Section 4.17  CASUALTIES;  TAKING OF PROPERTIES  ETC. Since the date of
the most recent  financial  statements  of the  Borrower as described in Section
4.7,  neither the  business  nor the  properties  of the  Borrower or any of its
Subsidiaries have been affected as a result of any fire, explosion,  earthquake,
flood, drought, windstorm, accident, strike or other labor disturbance, embargo,
requisition  or taking of  property or  cancellation  of  contracts,  permits or
concessions by any Governmental  Authority,  riot, activities of armed forces or
acts of God or of any public enemy which could  reasonably be expected to have a
Materially Adverse Effect.

         Section 4.18  SOLVENCY.  As of the Closing Date and after giving effect
to the transactions to be consummated on the Closing Date:

                  (a) The fair saleable  value of the assets of the Borrower and
each Subsidiary will exceed the amount that will be required to be paid on or in
respect  of  the  existing  debts  and  other  liabilities   (including  without
limitation  contingent  liabilities)  of the Borrower or such Subsidiary as such
debts and liabilities become absolute and mature.

                  (b) Neither the assets of the  Borrower  nor the assets of any
Subsidiary will constitute  unreasonably  small capital for the Borrower or such
Subsidiary  to carry out its  businesses  as now conducted and as proposed to be
conducted including the capital needs of the Borrower or such Subsidiary, taking
into account the particular  capital  requirements of the business  conducted by
the Borrower or such Subsidiary and projected  capital  requirements and capital
availability thereof.



                                       46
<PAGE>

                  (c) Neither the Borrower nor any of its  Subsidiaries  intends
to incur Debts beyond its ability to pay such Debts as they mature,  taking into
account  the timing and  amounts of cash to be received by it, and of amounts to
be payable on or in respect of its Debts. The cash flow of the Borrower and each
Subsidiary,  after taking into account all  anticipated  uses of the cash of the
Borrower or such  Subsidiary,  will at all times be  sufficient  to pay all such
amounts on or in respect of Debt of the  Borrower or such  Subsidiary  when such
amounts are required to be paid.

         Section  4.19  LABOR RELATIONS.  Neither  the  Borrower  nor any of its
Subsidiaries is engaged in any unfair labor practice which  reasonably  could be
expected  to have a  Materially  Adverse  Effect.  There is (i) no unfair  labor
practice complaint pending or, to the best knowledge of the Borrower, threatened
against  the  Borrower  or any of its  Subsidiaries  before the  National  Labor
Relations Board which could reasonably be expected to have a Materially  Adverse
Effect,  and no grievance or  arbitration  proceeding  arising out of or under a
collective  bargaining  agreement is so pending or, to the best knowledge of the
Borrower, threatened; and (ii) no strike, labor dispute, slowdown or stoppage is
pending or threatened against the Borrower or any of its Subsidiaries.

         Section 4.20  YEAR 2000 COMPLIANCE.  The  Borrower has (i)  initiated a
review and  assessment  of all areas  within  its and each of its  Subsidiaries'
business and  operations  (including  those  affected by suppliers,  vendors and
customers) that could be adversely affected by the "Year 2000 Problem" (that is,
the  risk  that  computer  applications  used  by  the  Borrower  or  any of its
Subsidiaries  (or  its  suppliers,  vendors  and  customers)  may be  unable  to
recognize and perform properly date-sensitive  functions involving certain dates
prior to and any date  after  December  31,  1999),  (ii)  developed  a plan and
timeline for  addressing  the Year 2000 Problem on a timely basis,  and (iii) to
date,  implemented  that plan in accordance  with that  timetable.  Based on the
foregoing, the Borrower believes that all computer applications (including those
of its suppliers,  vendors and customers) that are material to its or any of its
Subsidiaries'  business  and  operations  will on a timely  basis  be Year  2000
Compliant,  except to the extent that a failure to do so could not reasonably be
expected to have Materially Adverse Effect.




                                       47
<PAGE>

                                    ARTICLE 5
                              CONDITIONS OF LENDING
                              ---------------------

         Section 5.1  CONDITIONS  PRECEDENT TO THE FIRST LOAN. The obligation of
the  Lenders to make the first Loan and of the  Issuing  Bank to issue the first
Letter of Credit is subject to the following conditions:

                  (a) each  Lender  shall  have  received  a Note or Notes  duly
executed and delivered by the Borrower payable to the order of such Lender; and

                  (b) all  legal  matters  incident  to this  Agreement  and the
borrowings  hereunder and the other Loan Documents  shall be satisfactory to the
Lenders and their  counsel and to Mays &  Valentine,  L. L. P.,  counsel for the
Agent; and

                  (c) the  Agent  shall  have  received  a  closing  certificate
substantially  in the form of EXHIBIT D completed  on behalf of the Borrower and
substantially in the form of EXHIBIT E completed on behalf of any Guarantor; and

                  (d) the Agent shall have received an opinion of counsel to the
Borrower  and each of the  Guarantors  substantially  in the form of  EXHIBIT  F
hereto; and

                  (e)  the  Agent   shall  have   received   such   supplemental
certificates, opinions and documents as the Agent may reasonably request; and

                  (f) there  shall  have  occurred  no  change in the  financial
condition of the Borrower  since  September  30, 1998,  which could result in an
Material Adverse Effect; and

                  (g) the Agent shall have received duly executed  copies of the
Guaranties of all Guarantors in existence on the Closing Date; and

                  (h) the  Agent  shall  have  received  executed  copies of the
Collateral  Documents of the  Borrower,  and all  Guarantors in existence on the
Closing Date, granting to the Agent a first Lien in all the Collateral described
therein; and

                  (i) the Agent shall have  received  certificates  representing
the shares of any stock  pledged  under the Pledge  Agreements  in effect on the
Closing  Date,  duly  endorsed  in blank or  accompanied  by stock  powers  duly
executed in blank; and



                                       48
<PAGE>

                  (j) (A) each document  (including,  without  limitation,  each
Uniform Commercial Code financing  statement but excluding filings with the U.S.
Copyright  Office and the U.S. Patent and Trademark  Office)  required by law or
reasonably  requested by the Agent to be filed,  registered or recorded in order
to create in favor of the Agent a perfected first priority  security interest in
the Collateral  shall have been properly  filed,  registered or recorded in each
jurisdiction  in which the filing,  registration  or  recordation  thereof is so
required or  requested;  (B) within ten (10) days after the Closing  Date,  each
filing with the U.S.  Copyright  Office and the U.S. Patent and Trademark Office
required by law or reasonably requested by the Agent to be filed,  registered or
recorded  with  respect  to the  Collateral  shall  have  been  properly  filed,
registered or recorded in the appropriate  office;  and (C) the Agent shall have
received, within thirty (30) days after the date of such Loan, an acknowledgment
copy, or other evidence  satisfactory  to it, of each of the foregoing  filings,
registrations and recordations; and

                  (k) receipt by the Agent of  certified  copies of Requests for
Information  or  Copies  (Form  UCC-11),  or  equivalent  reports,  listing  the
financing  statements referred to in paragraph (j) above and all other effective
financing  statements  that name the Borrower  (under its present  names and any
previous  names) as debtors or sellers  and that are filed in the  jurisdictions
referred to in paragraph (j) above, together with copies of such other financing
statements  (none of which  shall  cover the  Collateral,  except  as  otherwise
disclosed in writing to, and accepted by, the Agent);

                  (l) receipt by the Agent of evidence of the insurance required
by Section 6.4 and the Collateral Documents; and

                  (m) receipt by the Agent of all  documents  it may  reasonably
request relating to the existence of the Borrower and the Guarantors,  and their
respective  authority  to execute,  deliver and  perform,  as  applicable,  this
Agreement,  the Notes,  the  Guaranties,  and the  Collateral  Documents and the
validity  of this  Agreement,  the  Notes,  the  Guaranties  and the  Collateral
Documents  and any other  matters  relevant  hereto or thereto,  all in form and
substance reasonably satisfactory to the Agent.

         Section 5.2  CONDITIONS  PRECEDENT TO EACH LOAN. The obligation of each
Lender to make  each Loan and of the  Issuing  Bank to  issue,  amend,  renew or
extend  any Letter of Credit is subject  to the  satisfaction  of the  following
conditions:

                  (a) receipt by the Agent of a Notice of Borrowing, or a Letter
of Credit Request, as the case may be;

                  (b) each of the representations and warranties of the Borrower
contained  in this  Agreement  and in any other  Loan  Document  or  certificate
delivered  to the Agent or any  Lender  hereunder  shall be true,  complete  and
accurate  on and as of the date of such Loan or Letter  of  Credit  issuance  as
though made on and as of such date, except that  representations  and warranties
under Section 4.7 shall refer to the most recent financial  statements  provided
pursuant to Section 6.1;



                                       49
<PAGE>

                  (c) no event shall have occurred and be  continuing,  or shall
result from such Loan or such Letter of Credit,  which  constitutes a Default or
an Event of Default;

                  (d) since the date of the  financial  statements  described in
Section 4.7, no event shall have occurred which could  reasonably be expected to
have a Materially  Adverse Effect; and receipt by the Agent of such supplemental
certificates, opinions and documents as the Agent may reasonably request.

Each  Loan  made and each  Letter  of  Credit  issued  shall be  deemed  to be a
representation  and  warranty by the Borrower on the date of such Loan or Letter
of Credit as to the facts  specified in clauses (b), (c) and (d) of this Section
5.2.

         Section 5.3  PERMITTED ACQUISITIONS. In the case of each Revolving Loan
made to finance all or any portion of a Permitted  Acquisition  (and in addition
to the requirements of Section 5.2):

                  (a) The  Borrower  shall  deliver to the Agent a  certificate,
dated as of the date of disbursement  of said Revolving Loan,  pursuant to which
the Borrower  shall  warrant and  represent to the Agent that (i) to the best of
its knowledge, each of the representations and warranties made by the sellers of
the Target to the Acquisition  Company under such Acquisition  Agreement is true
and correct; (ii) except as specifically disclosed in writing to the Agent prior
to the date of said Revolving Loan, no broker or finder brought about the making
or  closing  of such  Revolving  Loan  made  with  respect  to such  Acquisition
Agreement, and none of the Borrower, the Acquisition Company, any Lender, or the
Agent has any  obligation  to any Person in respect of any finder's or brokerage
fees  in  connection  with  such  Revolving  Loan;  (iii)  the  parties  to  the
Acquisition Agreement have complied with all requirements of every bulk sales or
transfer law that may be  applicable  to the sale of the acquired  assets to the
Acquisition  Company,  or the Acquisition  Company has obtained  indemnification
against any and all  liability  arising from the failure to so comply;  (iv) the
Acquisition  Agreement  has not been  amended  except  as set  forth in  written
amendments  thereto  delivered to the Agent prior to the date of said  Revolving
Loan, (v) the applicable  Acquisition  Analysis and Pro Forma Financials  remain
accurate  and  complete  in all  material  respects;  and  (vi)  as of the  date
immediately after the consummation of all the agreements and transactions  under
and pursuant to such  Acquisition  Agreement,  the  Acquisition  Company and its
Subsidiaries  will not have any material  amount of  liabilities,  contingent or
otherwise, not reflected in the Pro Forma Financials.

                  (b) Not later than sixty (60) days after the date of each such
Acquisition,  termination  statements  or  releases  shall  have been filed with
respect  to any  financing  statements  or Liens  covering  any  portion  of the
Acquired assets having a value or securing indebtedness in excess of Two Million
Dollars ($2,000,000), except for financing statements perfecting Liens permitted
by this Agreement.

                  (c) The Agent shall have received evidence  satisfactory to it
that,  after giving effect to the Revolving  Loan,  neither the Borrower nor any
Subsidiary of the Borrower is or will be rendered  insolvent  within the meaning
of  Section  548 of  the  Federal  Bankruptcy  Code  and  any  applicable  state



                                       50
<PAGE>

fraudulent conveyance laws. This condition may be satisfied by delivering to the
Agent a Solvency Certificate, in substantially the form of EXHIBIT M attached to
this Agreement, dated as of the disbursement date of the Revolving Loan.

                  (d) The Acquisition  shall comply with all of the requirements
of Section 2.5 hereof.


                                    ARTICLE 6
                              AFFIRMATIVE COVENANTS
                              ---------------------

         So long as any Lender has a commitment or any Letter of Credit shall be
outstanding  and until payment in full of the Notes and performance of all other
obligations of the Borrower hereunder, the Borrower will:

         Section 6.1  FINANCIAL STATEMENTS AND REPORTS. Furnish to the Agent and
each Lender:

                  (a) as soon as available  but in no event  within  ninety (90)
days after the end of each fiscal year of the Borrower, its audited consolidated
balance  sheet and related  statements  of  earnings,  changes in  shareholders'
equity and cash flows as of the end of and for such year,  setting forth in each
case in comparative  form the figures for the previous fiscal year, all reported
on by KPMG LLP, or other independent public  accountants of recognized  national
standing  (without a "going  concern" or like  qualification  or  exception  and
without any  qualification  or  exception  as to the scope of such audit) to the
effect  that  such  consolidated  financial  statements  present  fairly  in all
material respects the financial  position,  results of operations and cash flows
of the Borrower  and its  Consolidated  Subsidiaries  in  accordance  with GAAP;
PROVIDED,  that the Borrower may deliver,  in lieu of the foregoing,  the annual
report of the Borrower for such fiscal year on Form 10-K filed with the SEC, but
only so long as the financial statements contained in such annual report on Form
10-K are substantially the same in content as the financial  statements referred
to in the preceding provisions of this paragraph (a);

                  (b) as soon as available  but in any event  within  forty-five
(45) days  after  the end of each of the first  three  fiscal  quarters  of each
fiscal  year  of the  Borrower,  its  consolidated  balance  sheet  and  related
statements  of  earnings  and cash  flows  as of the end of and for such  fiscal
quarter and the then elapsed  portion of the fiscal year,  setting forth in each
case in comparative form the figures for the corresponding  period or periods of
(or, in the case of the balance  sheet,  as of the end of) the  previous  fiscal
year, all certified by its Principal  Financial  Officer as presenting fairly in
all material  respects the financial  position,  results of operations  and cash
flows of the Borrower and its Consolidated Subsidiaries in accordance with GAAP,
subject to normal  year-end  audit  adjustments  and the  absence  of  footnotes
PROVIDED,  HOWEVER, that the Borrower may deliver, in lieu of the foregoing, the
quarterly report of the Borrower for such fiscal quarter on Form 10-Q filed with
the  SEC,  but  only so  long  as the  financial  statements  contained  in such
quarterly  report  on Form 10-Q are  substantially  the same in  content  as the
financial  statements referred to in the preceding  provisions of this paragraph
(b);



                                       51
<PAGE>

                  (c)  concurrently  with each delivery of financial  statements
under clause (a) or (b) above, a No-Default Certificate;

                  (d)  concurrently  with each delivery of financial  statements
under clause (a) above, a letter signed by the accounting  firm that reported on
such financial  statements to the effect that, in the course of the  examination
upon which its report for such fiscal year was based (but without any special or
additional  audit procedures for that purpose other than review of the terms and
provisions of this  Agreement),  nothing came to its attention that caused it to
believe that there were any Defaults or Events of Default  involving  accounting
matters or, if such firm became aware of any such Defaults or Events of Default,
specifying the nature thereof;

                  (e) promptly after the same become publicly available,  copies
of all  periodic  and other  reports on Forms  8-K,  10-Q and 10-K and all proxy
statements  filed by the  Borrower or any  Subsidiary  with the SEC or any other
documents  distributed  by the  Borrower  to its  shareholders  generally  which
contain the  information  equivalent  to that  contained  in such forms or proxy
statements;

                  (f) promptly  upon  request,  but in no event less  frequently
than each June 30 and  December 31, the  Borrower  shall  deliver to the Agent a
copy of the title document for each titled vehicle then owned by the Borrower or
any Subsidiary, together with a list of each motor vehicle owned by the Borrower
or any of its Subsidiaries,  and the vehicle identification number for each such
vehicle;

                  (g) promptly  upon  request,  but in no event less  frequently
than on each June 30 and December 31, the Borrower  shall deliver to the Agent a
list of all locations where title documents for each titled vehicle are kept;

                  (h)  promptly  following  any  request  therefor,  such  other
information  regarding the operations and financial condition of the Borrower or
any Subsidiary,  or compliance  with the terms of this Agreement,  as any Lender
and Agent may reasonably request.

         Section 6.2  LITIGATION AND OTHER NOTICES.Furnish to the Agent and each
Lender the following:

                  (a) as soon as  possible  and,  in any event,  within five (5)
days of any officer of the Borrower obtaining  knowledge of any Default or Event
of Default,  a certificate  of the Principal  Financial  Officer of the Borrower
setting  forth the  details of such  Default or Event of Default  and the action
which the Borrower has taken or proposes to take with respect thereto,  PROVIDED
that the failure of the  Borrower to give such notice shall not affect the right
and power of the  Lenders  to  exercise  any or all of the  remedies  on default
specified herein;

                  (b) promptly  after the  commencement  thereof,  notice of all
actions, suits,  proceedings or investigations which involve claims which exceed
the Borrower's  insurance or  indemnification by more than Five Hundred Thousand



                                       52
<PAGE>

Dollars ($500,000),  or which involve more than One Million Dollars ($1,000,000)
in excess of such insurance or indemnification in the aggregate; and

                  (c) promptly after such change,  notice of any material change
in the management of the Borrower or any of its  Subsidiaries and any changes in
the business,  assets,  liabilities,  condition (financial or other), results of
operations  or business of the Borrower or any of its  Subsidiaries  which could
reasonably be expected to have a Materially Adverse Effect.

         Section 6.3  TAXES.  File or cause to be filed within the required time
period all tax returns  which are required to be filed by the Borrower or any of
its  Subsidiaries  and pay or cause to be paid  prior  to the time  they  become
delinquent or a penalty  attaches  thereto all taxes shown to be due and payable
on said returns or on any written  assessments  made against the Borrower or any
Subsidiary or any of their  respective  properties and all other taxes,  fees or
other  charges  imposed  on  any  of  them  or  any  of  their  property  by any
Governmental  Authority  (other  than those the amount or  validity  of which is
currently  being  contested in good faith by  appropriate  proceedings  and with
respect to which  reserves  in  conformity  with GAAP have been  provided on the
books of the Borrower or its  Subsidiaries,  as the case may be),  PROVIDED that
nothing  contained  in this  Section  6.3 shall  obligate  the  Borrower  or any
Subsidiary to pay any taxes which are of an inconsequential amount.

         Section 6.4  INSURANCE. Maintain, and cause each of its Subsidiaries to
maintain,  adequate  insurance,  with responsible  companies in such amounts and
against such risks as is customarily carried by owners of similar businesses and
property.

         Section  6.5  CORPORATE  EXISTENCE.  Maintain  and  cause  each  of its
Subsidiaries  to maintain its corporate  existence in good standing  except that
nothing  contained  in this  Section  6.5 shall  prohibit  any  transaction  not
prohibited by Section 7.4.

         Section 6.6  PROPERTIES. Maintain, preserve, and protect all franchises
and  trade  names;  preserve  all the  remainder  of its  property  which in the
reasonable  judgment of the Borrower is  necessary in the proper  conduct of its
business;  keep the same in good repair, working order, and condition,  ordinary
wear  and tear  excepted,  and  from  time to time  make or cause to be made all
needful  and  proper   repairs,   renewals,   replacements,   betterments,   and
improvements thereto so that the business carried on in connection therewith may
be  properly  and  advantageously  conducted  at all  times;  cause  each of its
Subsidiaries so to maintain its respective  properties;  and permit the Agent or
any Lender and their respective agents at all reasonable times to enter upon and
inspect such properties.

         Section 6.7 EMPLOYEE BENEFIT PENSION PLANS.  Promptly during each year,
pay  and  cause  its   Subsidiaries  to  pay  or  otherwise  cause  to  be  paid
contributions  adequate to meet at least the minimum funding standards set forth
in Sections 302 through 305 of ERISA,  with respect to each Employee Plan of the
Borrower and each ERISA Affiliate;  file or cause to be filed each annual report
required to be filed  pursuant to Section 103 of ERISA in  connection  with each
such Employee Plan for each year; and notify each Lender within ten (10) days of
the  occurrence  of  a  Reportable  Event  that  might  constitute  grounds  for
termination of any such Employee Plan by the PBGC or for the  appointment by the



                                       53
<PAGE>

appropriate  United States  District  Court of a trustee to administer  any such
Employee  Plan,  PROVIDED  that  nothing  contained  herein  shall  prohibit the
Borrower or any ERISA  Affiliate from  terminating  any such Employee Plan if it
has theretofore complied with the provisions of this Section.

         Section 6.8  COMPLIANCE WITH LAWS; MATERIAL CONTRACTS. Comply and cause
each of its  Subsidiaries  to comply in all material  respects with all Material
Contracts and with all applicable  laws,  rules,  regulations  and orders of any
Governmental   Authority  having   jurisdiction  over  it,  including,   without
limitation,  all  Environmental  Laws if and to the extent the failure to comply
therewith would have a Materially Adverse Effect, and in the event it shall fail
to do so, promptly advise the Agent in writing of such failure and the action it
is taking or proposes to take to remedy such  condition.  Nothing  contained  in
this Section 6.8 shall  prevent  either the Borrower or any of its  Subsidiaries
from contesting in good faith and by appropriate proceedings any such law, rule,
regulation or order.

         Section  6.9  ADDITIONAL  SUBSIDIARIES.  Promptly  notify  the Agent in
writing if it Acquires any Subsidiary.

         Section  6.10  FINANCIAL  COVENANTS.  So long as any Note shall  remain
unpaid, any Letter of Credit remains  outstanding,  or any Lender shall have any
Commitment hereunder,  the Borrower shall maintain,  unless the Required Lenders
shall otherwise consent in writing:

                  (a) NET  WORTH.  As of the end of each  fiscal  quarter of the
Borrower, Net Worth of not less than the Minimum Compliance Level.

                  (b) LEVERAGE  RATIO.  For each twelve (12) month period ending
on the last day of each fiscal quarter of the Borrower,  a Leverage Ratio of not
more than 2.5 to 1.

                  (c) FIXED CHARGE  COVERAGE  RATIO.  For each twelve (12) month
period ending on the last day of each fiscal  quarter of the  Borrower,  a Fixed
Charge  Coverage  Ratio of not less  than (1) 1.5 to 1 for each  fiscal  quarter
through the fiscal  quarter  ending on December 31,  1999,  and (2) 2.0 to 1 for
each fiscal quarter thereafter.

         Section 6.11  YEAR 2000 COMPLIANCE.  The Borrower will promptly  notify
(in  reasonable  detail)  the  Agent in the  event  the  Borrower  discovers  or
determines  that any computer  application  (including  those of its  suppliers,
vendors  and  customers)  that is  material  to its or any of its  Subsidiaries'
business  and  operations  will not be Year 2000  Compliant  on a timely  basis,
except to the extent that such failure could not  reasonably be expected to have
a Materially Adverse Effect.

         Section 6.12 USE OF PROCEEDS. The proceeds of the Loans will be used by
the Borrower for working capital, capital expenditures,  Permitted Acquisitions,
and other lawful corporate  purposes.  None of the proceeds of the Loans will be
used, directly or indirectly, for the purpose, whether immediate,  incidental or
ultimate, of purchasing or carrying any Margin Stock.



                                       54
<PAGE>

                                    ARTICLE 7
                               NEGATIVE COVENANTS
                               ------------------

         So long as any Lender has a commitment  hereunder  and until payment in
full of the  Notes and  performance  of all other  obligations  of the  Borrower
hereunder,  without the written  consent of the Required  Lenders,  the Borrower
will not:

         Section 7.1  FUNDED DEBT.  Create, incur,  assume or suffer to exist or
permit any  Subsidiary  to create,  incur,  assume or suffer to exist any Funded
Debt except:

                  (a) Funded Debt of the Borrower or the Subsidiaries under this
Agreement or the Notes;

                  (b)  Funded  Debt  of  the   Borrower   and  each   Subsidiary
subordinated on terms satisfactory to the Required Lenders to the Borrower's and
each Subsidiary's respective obligations under the Notes and the Loan Documents;

                  (c) Funded Debt of the Borrower and each Subsidiary secured by
Liens   permitted  by  Section  7.2  (e)  not  to  exceed  One  Million  Dollars
($1,000,000) in the aggregate;

                  (d) Funded Debt or other  obligations  incurred in  connection
with Earn Out Provisions;

                  (e) Funded Debt incurred in connection with Capitalized  Lease
Obligations,  but not to  exceed  Two  Million  Five  Hundred  Thousand  Dollars
($2,500,000) in the aggregate;

                  (f) Funded Debt secured by one or more  mortgage(s) or deed(s)
of trust on real property of the Borrower or any  Subsidiary in an amount not to
exceed Five Million Dollars ($5,000,000) in the aggregate;

                  (g) Funded Debt listed on SCHEDULE 7.1 attached hereto;

                  (h)  Up  to  Two  Million   Five  Hundred   Thousand   Dollars
($2,500,000)  in the  aggregate  of any Funded  Debt (other than the Funded Debt
referred  to in  Sections  7.1(a)-(g)  above)  assumed  in  connection  with any
Permitted  Acquisition and which has been or will be, paid or refinanced  within
six (6) months from the date of the closing of the  Permitted  Acquisition  by a
Revolving Loan;


                  (i)  Additional  Funded  Debt,  including,  but not limited to
Funded Debt  incurred by the  Borrower  arising  out of any swap  agreement  (as
defined in 11 U.S.C.  101) or under any foreign exchange  contracts on a mark to
market  basis,  in an amount when  combined  with the Funded Debt referred to in
Sections 7.1 (b) - (h) above) does not exceed Ten Million Dollars  ($10,000,000)
in the aggregate; and



                                       55
<PAGE>

                  (j)  Funded  Debt   incurred  in   connection   with   certain
consignment Inventory from TCI.

         Section 7.2  MORTGAGES AND PLEDGES. Create, incur, assume, or suffer to
exist any Lien upon any of its property or assets other than Unrestricted Margin
Stock,  whether now owned or hereafter acquired,  or permit any Subsidiary so to
do, except:

                  (a) Liens  existing at the date of this Agreement and securing
Debt  outstanding  on the date of this  Agreement  and  listed on  SCHEDULE  7.2
attached hereto;

                  (b)  Liens  securing  Debt  owing  by  any  Subsidiary  to the
Borrower or to another Subsidiary which is wholly-owned;

                  (c) Liens on assets of any  corporation  existing  at the time
such corporation becomes a Subsidiary;

                  (d)  Liens  on  assets  existing  at the  time of  acquisition
thereof;  PROVIDED that such Lien shall not extend to any other  property of the
Borrower or a Subsidiary;

                  (e) Liens to secure indebtedness incurred or guaranteed by the
Borrower or a  Subsidiary  to finance the purchase  price of land,  buildings or
equipment or improvements  to or  construction of land,  buildings or equipment,
which indebtedness is incurred or guaranteed prior to, at the time of, or within
one hundred  eighty  (180) days after such  acquisition  (or in the case of real
property, completion of such improvement or construction or commencement of full
operation of such property,  whichever is later);  PROVIDED that such Lien shall
extend only to the asset to be acquired or improved with such financing;

                  (f) Liens on any assets of a corporation  existing at the time
such  corporation  is  merged  into  or  consolidated  with  the  Borrower  or a
Subsidiary;  PROVIDED  that such Lien shall not extend to any other  property of
the Borrower or a Subsidiary;

                  (g) any  extension,  renewal  or  replacement  (or  successive
extensions,  renewals or replacements) in whole or in part, of any lien referred
to in the foregoing paragraphs (a) to (f), inclusive;

                  (h) Liens for property taxes and  assessments or  governmental
charges or levies and liens securing claims or demands of mechanics,  suppliers,
carriers, landlords and other like Persons, PROVIDED that payment thereof is not
at the time required by Section 6.3;

                  (i) Liens incurred or deposits made in the ordinary  course of
business in  connection  with  worker's  compensation,  unemployment  insurance,
social  security and other like laws, or to secure the performance of letters of
credit, bids, sales contracts, leases, statutory obligations, surety, appeal and
performance  bonds and other similar  obligations,  in each case not incurred in
connection with the borrowing of money, the obtaining of advances or the payment
of the deferred purchase price of property;



                                       56
<PAGE>

                  (j)  attachment,  judgment and other  similar Liens arising in
connection with court proceedings, PROVIDED that execution and other enforcement
of such liens are  effectively  stayed and all claims which the Liens secure are
being actively contested in good faith and by appropriate proceedings;

                  (k) Liens  arising in the  ordinary  course of the business or
incidental to the conduct of such business or the ownership of the assets of the
Borrower or any Subsidiary  which Liens arise out of transactions  involving the
sale or purchase  of goods or  services  and which do not, in the opinion of the
Agent,  materially  impair  the  use of such  assets  in the  operations  of the
business of the Borrower or such Subsidiary;

                  (l) Liens  other than those  described  in clauses (a) through
(k) above provided the sum of (i) the aggregate principal amount secured thereby
at any time  outstanding  and (ii) the aggregate  amount of sale and  lease-back
transactions  measured as provided in Section 7.3 consummated after December 31,
1998 does not exceed One Million Dollars ($1,000,000);

                  (m) The TCI Liens; and

                  (n) Liens to secure any Funded Debt  incurred or maintained by
the Borrower arising out of any swap agreement (as defined in 11 U.S.C.  101) or
under any foreign  exchange  contact and permitted  under Section 7.1(i) of this
Agreement.

         Section 7.3  SALE AND LEASE-BACK.  Sell,  or permit any  Subsidiary  to
sell, any property (other than Unrestricted  Margin Stock),  and then lease-back
that property or similar property for a term of more than three years.

         Section 7.4  MERGER, CONSOLIDATION,  OR SALE OF ASSETS.  Enter into any
merger or consolidation with any Person, other than Permitted  Acquisitions,  or
sell,  lease, or otherwise  Dispose of all or  substantially  all of its assets,
except in the ordinary  course of its  business and except for the  Conceptronic
Disposition,  or permit any Subsidiary so to do, except that a Subsidiary may be
merged or consolidated  with another  Subsidiary,  a Subsidiary may be merged or
consolidated  with any other  corporation which is or will upon the consummation
of such merger or  consolidation  be a Subsidiary  not less than eighty  percent
(80%) of the  capital  stock of which is owned  directly  or  indirectly  by the
Borrower, or into the Borrower, and any other corporation may be merged into the
Borrower,  PROVIDED  that,  (a) in the case of any such merger or  consolidation
with the Borrower,  the Borrower is the surviving corporation and the management
of the Borrower continues as the management of the surviving corporation, (b) in
any case, such merger or  consolidation  does not violate any other provision of
this Agreement and upon the effective date of the merger or consolidation  there
exists no Default or Event of Default  hereunder  and (c) the  Borrower  and its
Subsidiaries  will be  permitted  to sell,  transfer  and  otherwise  Dispose of
Unrestricted Margin Stock without regard to the foregoing restrictions.

         Section 7.5  DISTRIBUTIONS. Make, or permit any Subsidiary to make, any
Distribution,  other than the  Conceptronic  Disposition  and  Distributions  to



                                       57
<PAGE>

Conceptronic  in an  aggregate  amount not to exceed Two  Million  Five  Hundred
Thousand  Dollars  ($2,500,000),  except that any Subsidiary of the Borrower may
pay dividends to the Borrower or to any other Subsidiary that is its parent.

         Section 7.6  INVESTMENTS.  Purchase or hold beneficially, or permit any
of its  Subsidiaries  to  acquire  or hold  beneficially,  any  stock  or  other
securities  or  evidences  of debt of, or make or  permit to exist any  interest
whatsoever  in, or make or permit to exist any loans or advances to, any Person,
except that an  Acquisition  Company  may make  Permitted  Acquisitions  and the
Borrower and its Subsidiaries may make investments:

                  (i) in  certificates  of  deposit of or time  deposits  with a
maturity  of one (1) year or less with any Lender or any  commercial  bank whose
deposits are insured by federal deposit insurance and having capital and surplus
in excess of One Hundred Million Dollars ($100,000,000);

                  (ii) in  securities  issued or guaranteed by the United States
of America or any agency thereof with maturities of one year or less;

                  (iii) in short-term  commercial  paper rated A-1 by Standard &
Poor's Corporation or P-1 by Moody's Investors Service, Inc.; or

                  (iv) in any of its Subsidiaries.

         Section 7.7 CHANGE IN BUSINESS. Make, or permit any Subsidiary to make,
any  material  change in the  nature of its  business  as carried on at the date
hereof, including any such change by reason of Acquisition.

         Section  7.8  AFFILIATE  TRANSACTIONS.  Engage,  or  permit  any of its
Subsidiaries  to engage,  at any time in any transaction  with an Affiliate,  or
make an  assignment or other  transfer of any of its  properties or assets to an
Affiliate,  whether or not in the  ordinary  course of  business,  other than on
terms  and  conditions  substantially  as  favorable  to the  Borrower  or  such
Subsidiary as would be obtainable by the Borrower or such Subsidiary at the time
in a comparable arm's-length transaction with a Person other than an Affiliate.

         Section 7.9 CAPITAL  TRANSACTIONS.  The Borrower will not, and will not
permit any of its  Subsidiaries to, directly make any expenditures in respect of
the purchase or other  acquisition of fixed or capital assets  (excluding normal
replacements and maintenance  which are properly charged to current  operations)
in excess of (i) in fiscal year 1999,  seventy five percent  (75%) of EBITDA for
fiscal year 1998,  (ii) in fiscal year 2000,  sixty five percent (65%) of EBITDA
for fiscal  year 1999,  and (iii) in fiscal  year 2001 and in each  fiscal  year
thereafter, sixty percent (60%) of the previous fiscal year's EBITDA.




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<PAGE>

                                    ARTICLE 8
                                     DEFAULT
                                     -------

         Section 8.1  EVENTS OF DEFAULT.  Each of the following shall constitute
an "Event of Default" hereunder:

                  (a)  The  Borrower  shall  fail  to make  any  payment  of any
interest  upon any of the  Notes  within  three (3)  Business  Days of when such
interest is due and payable; or

                  (b) The Borrower shall fail to pay any Agent's Fee, Commitment
Fee on the Unused Portion of the Loan or Letter of Credit Fee payable  hereunder
when such fee is due and payable; or

                  (c)  The  Borrower  shall  fail  to make  any  payment  of any
principal of the Notes when and as the same becomes due and payable; or

                  (d) The  Borrower  shall fail to observe or perform  any term,
covenant  or  agreement  contained  in  Sections  6.10  or  Article  VII of this
Agreement; or

                  (e) The  Borrower  shall fail to observe or perform  any term,
covenant or agreement  contained  in Section 6.1 and such  failure  shall remain
uncured for five (5) days after written notice from the Agent; or

                  (f) The  Borrower  shall fail to observe or perform  any term,
covenant or agreement  contained in this Agreement or in any other Loan Document
(other than those specified in clause (a), (b), (c) (d), or (e) of this Section)
and such  Default  shall  continue  unremedied  for a period of thirty (30) days
after written notice from the Agent; or

                  (g) A  custodian,  other  than a  trustee,  receiver  or agent
appointed or  authorized  to take charge of less than  substantially  all of the
property of the Borrower or any  Subsidiary  for the purpose of enforcing a Lien
against such property,  is appointed for, or takes possession of any property or
assets of, the Borrower or any Subsidiary; or


                  (h) Any representation or warranty made by the Borrower herein
or in any other Loan  Document or any  statement or  representation  made in any
certificate,  report, or opinion delivered  pursuant hereto or in any other Loan
Document shall prove to have been  incorrect in any material  respect when made;
or

                  (i) The  Borrower or any  Subsidiary  shall be  generally  not
paying its Debts as such Debts become due,  shall become  insolvent or unable to
meet its obligations as they mature, shall make an assignment for the benefit of
creditors, shall consent to the appointment of a trustee or a receiver, or shall
admit in writing its inability to pay its Debts as they mature; or



                                       59
<PAGE>

                  (j) A trustee or receiver (other than a custodian described in
Section  8.1(f)) shall be appointed for the Borrower or any  Subsidiary or for a
substantial  part of its properties  without the consent of the Borrower or such
Subsidiary and not be discharged within sixty (60) days; or

                  (k)  Any  case  in  bankruptcy  shall  be  commenced,  or  any
reorganization,  arrangement,  insolvency,  or liquidation  proceeding  shall be
instituted  by or against the  Borrower or any  Subsidiary,  and if commenced or
instituted  against it, be consented to by the  Borrower or such  Subsidiary  or
remain undismissed for a period of sixty (60) days; or

                  (l) Any default shall be made in the  performance of any other
obligation or  obligations  incurred in  connection  with any  indebtedness  for
borrowed  money of the  Borrower  or any  Subsidiary  aggregating  Five  Hundred
Thousand Dollars  ($500,000) or more, if the effect of such default is to permit
the holder of such notes or indebtedness (or a trustee on behalf of such holder)
to cause them or it to become due prior to their or its stated maturity,  or any
such note or indebtedness  becomes due prior to its stated maturity or shall not
be paid when due; or

                  (m) Any final  judgment or judgments  for the payment of money
in excess of One Million  Dollars  ($1,000,000)  which is or are not  adequately
insured or  indemnified  against  shall be rendered  against the Borrower or any
Subsidiary  and the same  shall  remain  undischarged  for a period of more than
thirty (30) days during which time execution shall not be effectively stayed; or

                  (n) Any substantial  part of the properties of the Borrower or
any part of the  properties  of any  Subsidiary  having a value,  as  reasonably
determined by the Agent,  of Five Hundred  Thousand  Dollars  ($500,000) or more
shall be  sequestered  or  attached  and  shall not have  been  returned  to the
possession of the Borrower or such  Subsidiary or released from such  attachment
within sixty (60) days; or

                  (n) A Change in Control shall occur.



                  (o) Any  Collateral  Document  shall for any  reason  cease to
create a valid and perfected first priority Lien on and security interest in the
collateral purported to be covered thereby,  except for (i) any lapse in a valid
perfected  first  priority Lien on and security  interest in, due to the Agent's
failure to file continuation  statements,  which failure, the Borrower will have
ten (10) days from  notice to cure,  (ii) the  failure  to  perfect  any lien on
intellectual property of Conceptronics, and (iii) on those Motor Vehicles, where
perfection  requires  possession of the title and/or the notation of the Agent's
lien on the title, and the Agent has not as of such date required that the title
be delivered to it and/or that its lien be noted on the title.



                                       60
<PAGE>

         Section  8.2.  REMEDIES.  In addition to all other  rights and remedies
provided  hereunder or under any of the Loan  Documents or as shall exist at law
or in equity from time to time, upon the occurrence of an Event of Default or at
any time during the continuance of any such Event of Default, the Agent may, and
the Agent  shall,  if requested  to do so by the  Required  Lenders,  by sending
written notice to the Borrower take either or both of the following actions,  at
the same or different times: (a) terminate  forthwith the Commitments  hereunder
and (b) declare the Notes to be forthwith  due and payable,  whereupon  all such
Notes shall be forthwith  due and payable,  both as to principal  and  interest,
without  presentment,  demand,  protest, or any other notice of any kind, all of
which are hereby expressly waived,  anything contained herein or in the Notes to
the contrary notwithstanding;  PROVIDED,  however, that notwithstanding anything
to  the  contrary  contained  herein,  upon  the  commencement  of any  case  in
bankruptcy  by the  Borrower  or the entry of an order for relief in any case in
bankruptcy  instituted  against the  Borrower or the consent by the  Borrower to
such an order,  the  Commitments  shall  terminate and all Notes,  including all
principal and interest thereon, shall be immediately due and payable.


                                    ARTICLE 9
                        SET-OFFS AND SHARING OF PAYMENTS
                        --------------------------------

         Section 9.1  RIGHT OF SET-OFF; ADJUSTMENTS. (a) Upon the occurrence and
during the  continuance  of any Event of  Default,  each Lender (and each of its
Affiliates)  is  hereby  authorized  at any time and from  time to time,  to the
fullest  extent  permitted  by law,  to set off and apply  any and all  deposits
(general or special, time or demand,  provisional or final) at any time held and
other  indebtedness  at any time owing by such Lender (or any of its Affiliates)
to or for the credit or the account of the  Borrower  against any and all of the
obligations  of the Borrower now or hereafter  existing under this Agreement and
the Note or Notes held by such Lender, irrespective of whether such Lender shall
have made any demand  under this  Agreement  or such Note or Notes and  although
such  obligations  may be unmatured.  Each Lender agrees  promptly to notify the
Borrower after any such set-off and application  made by such Lender;  PROVIDED,
HOWEVER,  that the failure to give such notice  shall not affect the validity of
such set-off and  application.  The rights of each Lender under this Section are
in addition to other rights and remedies (including,  without limitation,  other
rights of set-off) that such Lender may have.


                  (b) If any  Lender (a  "benefited  Lender")  shall at any time
receive any payment of all or part of the Loans owing to it, or interest thereon
other than as permitted  under  Section 2.13 of this  Agreement,  or receive any
Collateral in respect thereof (whether voluntarily or involuntarily, by set-off,
or otherwise),  in a greater  proportion  than any such payment to or collateral
received by any other Lender,  if any, in respect of such other  Lender's  Loans
owing to it, or interest thereon,  such benefited Lender shall purchase for cash
from the other  Lenders a  participating  interest in such  portion of each such
other  Lender's  Loans owing to it, or shall provide such other Lenders with the
benefits of any such Collateral,  or the proceeds thereof, as shall be necessary
to cause such  benefited  Lender to share the excess payment or benefits of such
Collateral or proceeds ratably with each of the Lenders; PROVIDED, HOWEVER, that
if all or any portion of such excess payment or benefits is thereafter recovered



                                       61
<PAGE>

from such benefited Lender,  such purchase shall be rescinded,  and the purchase
price and  benefits  returned,  to the  extent  of such  recovery,  but  without
interest. The Borrower agrees that any Lender so purchasing a participation from
a Lender pursuant to this Article 9 may, to the fullest extent permitted by law,
exercise  all of its rights of payment  (including  the right of  set-off)  with
respect  to such  participation  as fully  as if such  Person  were  the  direct
creditor of the Borrower in the amount of such participation.


                                   ARTICLE 10
                                    THE AGENT
                                    ---------

         Section 10.1  APPOINTMENT, POWERS, AND IMMUNITIES.  Each Lender and the
Issuing Bank hereby irrevocably  appoints and authorizes the Agent to act as its
agent under this  Agreement  and the other Loan  Documents  with such powers and
discretion  as are  specifically  delegated  to the  Agent by the  terms of this
Agreement and the other Loan  Documents,  together with such other powers as are
reasonably  incidental  thereto.  Notwithstanding  any provision to the contrary
elsewhere herein and the other Loan Documents,  the Agent (which term as used in
this sentence and in Section 10.5 and the first  sentence of Section 10.7 hereof
shall  include  its  Affiliates  and  its  own  and  its  Affiliates'  officers,
directors,   employees,   and  agents):   (a)  shall  not  have  any  duties  or
responsibilities  except those  expressly set forth in this  Agreement or any of
the other Loan Documents and shall not be a trustee or fiduciary for any Lender;
(b) shall not be  responsible  to the Lenders,  or any of them, for any recital,
statement,  representation,  or warranty (whether written or oral) made in or in
connection with any Loan Document or any certificate or other document  referred
to or provided for in, or received by any of them under,  any Loan Document,  or
for  the  value,  validity,  effectiveness,   genuineness,   enforceability,  or
sufficiency of any Loan Document,  or any other document referred to or provided
for therein or for any failure by any Loan Party or any other  Person to perform
any of its obligations thereunder;  (c) shall not be responsible for or have any
duty to ascertain,  inquire into, or verify the performance or observance of any
covenants or agreements by any Loan Party or the  satisfaction  of any condition
or to inspect the property  (including  the books and records) of any Loan Party
or any of its Subsidiaries or Affiliates;  (d) shall not be required to initiate
or conduct any litigation or collection proceedings under any Loan Document; and
(e) shall not be  responsible  for any action taken or omitted to be taken by it
under  or in  connection  with  any  Loan  Document,  except  for its own  gross
negligence   or   willful   misconduct.   The  Agent  may   employ   agents  and
attorneys-in-fact  and shall not be responsible for the negligence or misconduct
of any such agents or attorneys-in-fact selected by it with reasonable care. The
provisions  of this Section 10.1 are solely for the benefit of the Agent and the
Lenders,  and none of the Loan  Parties  shall have any rights as a third  party
beneficiary  of the provision  hereto.  In  performing  its functions and duties
under this Agreement and the other Loan Documents, the Agent shall act solely as
Agent of the Lenders and does not assume and shall not be deemed to have assumed
any obligations or relationship of Agency or trust with or for any Loan Party or
any of their respective Affiliates.


         Section  10.2  RELIANCE  BY AGENT.  The Agent shall be entitled to rely
upon any certification,  notice,  instrument,  writing,  or other  communication



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<PAGE>

(including,  without limitation,  any thereof by telephone or telecopy) believed
by it to be genuine and correct and to have been  signed,  sent or made by or on
behalf of the proper Person or Persons,  and upon advice and statements of legal
counsel (including  counsel for any Loan Party),  independent  accountants,  and
other experts  selected by the Agent.  The Agent may deem and treat the payee of
any Note as the holder  thereof  for all  purposes  hereof  unless and until the
Agent receives and accepts an Assignment  and Acceptance  executed in accordance
with Section 11.3 hereof.  As to any matters not expressly  provided for by this
Agreement,  the Agent shall not be required to exercise any  discretion  or take
any action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the  Required  Lenders,  and such  instructions  shall be  binding on all of the
Lenders;  PROVIDED,  HOWEVER,  that the Agent  shall not be required to take any
action that  exposes the Agent to personal  liability or that is contrary to any
Loan Document or applicable  law or unless it shall first be  indemnified to its
satisfaction  by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking any such action.

         Section 10.3  DEFAULTS. The Agent shall not be deemed to have knowledge
or notice of the  occurrence  of a Default or Event of Default  unless the Agent
has  received  written  notice  from a Lender or the  Borrower  specifying  such
Default  or Event of  Default  and  stating  that such  notice  is a "Notice  of
Default".  In the event that the Agent  receives such a notice of the occurrence
of a Default or Event of Default,  the Agent shall give prompt notice thereof to
the Lenders.  The Agent shall  (subject to Section 10.2 hereof) take such action
with respect to such Default or Event of Default as shall reasonably be directed
by the Required  Lenders,  PROVIDED THAT,  unless and until the Agent shall have
received  such  directions,  the Agent may (but shall not be obligated  to) take
such action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable in the best interest of the Lenders.

         Section 10.4  RIGHTS AS LENDER.  With respect to its Commitment and the
Loans  made by it,  NationsBank  (and any  successor  acting  as  Agent)  in its
capacity as a Lender or the Issuing  Bank  hereunder  shall have the same rights
and  powers  hereunder  as any other  Lender or any other  Issuing  Bank and may
exercise  the same as  though  it were not  acting  as the  Agent,  and the term
"Lender" or "Lenders"  and the term  "Issuing  Bank"  shall,  unless the context
otherwise  indicates,  include the Agent in its individual  capacity.  The Agent
(and any successor  acting as Agent) and its Affiliates  may (without  having to
account  therefor  to any  Lender)  accept  deposits  from,  lend money to, make
investments  in,  provide  services  to,  and  generally  engage  in any kind of
lending, trust, or other business with any Loan Party or any of its Subsidiaries
or  Affiliates  as if it were  not  acting  as  Agent,  and the  Agent  (and any
successor  acting  as  Agent)  and its  Affiliates  may  accept  fees and  other
consideration  from any Loan Party or any of its  Subsidiaries or Affiliates for
services in  connection  with this  Agreement  or  otherwise  without  having to
account for the same to the Lenders.


         Section  10.5  DELEGATION  OF DUTIES.  The Agent may execute any of its
duties  hereunder  or under the other Loan  Documents  by or  through  agents or
attorneys-in-fact  and shall be  entitled  to advice of counsel  concerning  all
matters  pertaining to such duties.  The Agent shall not be responsible  for the



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negligence or misconduct of any agents or  attorney-in-fact  selected by it with
reasonable care.

         Section 10.6  INDEMNIFICATION.  The Lenders agree ratably in accordance
with their  respective  Commitments (to the extent not reimbursed  under Section
11.1 hereof,  but without  limiting the  obligations  of the Borrower under such
Section) to indemnify and hold harmless the Agent and, the Issuing Bank and each
of  their  respective  Affiliates  and  their  respective  officers,  directors,
employees,  agents, and advisors (each, an "Indemnified Party") from and against
any  and  all  claims,  damages,  losses,   liabilities,   costs,  and  expenses
(including, without limitation, reasonable attorneys' fees) that may be incurred
by or asserted or awarded  against any  Indemnified  Party, in each case arising
out of or in connection with or by reason of (including,  without limitation, in
connection with any investigation,  litigation,  or proceeding or preparation of
defense in connection  therewith) the Loan  Documents,  any of the  transactions
contemplated  herein or the actual or proposed  use of the proceeds of the Loans
or any Letter of Credit  (including  any  refusal by an Issuing  Bank to honor a
demand  for  payment  under a Letter  of Credit  issued  by it if the  documents
presented in connection  with such demand do not strictly  comply with the terms
of the  Letter of  Credit),  except to the  extent  such  claim,  damage,  loss,
liability,  cost, or expense is found in a final,  non-appealable  judgment by a
court of competent  jurisdiction to have resulted from such Indemnified  Party's
gross  negligence  or  willful  misconduct.  In the  case  of an  investigation,
litigation or other  proceeding  to which the indemnity in this Section  10.5(b)
applies,  such indemnity shall be effective  whether or not such  investigation,
litigation or proceeding is brought by the Borrower, its directors, shareholders
or  creditors  or an  Indemnified  Party and  whether  any  other  Person or any
Indemnified  Party  is  otherwise  a  party  thereto  and  whether  or  not  the
transactions  contemplated  hereby are  consummated.  Without  prejudice  to the
survival of any other  agreement of the Borrower  hereunder,  the agreements and
obligations  of the Borrower  contained  in this Section 10.6 shall  survive the
payment in full of the Loans and all other amounts payable under this Agreement.

         Section  10.7  NON-RELIANCE  ON AGENT AND OTHER  LENDERS.  Each  Lender
expressly agrees that it has, independently and without reliance on the Agent or
any other Lender,  and based on such documents and  information as it has deemed
appropriate,  made  its own  credit  analysis  of the  Loan  Parties  and  their
Subsidiaries and its own decision to enter into this Agreement and that it will,
independently and without reliance upon the Agent or any other Lender, and based
on such  documents and  information  as it shall deem  appropriate  at the time,
continue to make its own analysis and  decisions in taking or not taking  action
under the Loan Documents.  Except for notices,  reports, and other documents and
information  expressly  required  to be  furnished  to the  Lenders by the Agent
hereunder,  the Agent shall not have any duty or  responsibility  to provide any
Lender with any credit or other  information  concerning the affairs,  financial
condition,  or  business  of any  Loan  Party  or any  of  its  Subsidiaries  or
Affiliates  that  may  come  into  the  possession  of the  Agent  or any of its
Affiliates.

         Section  10.8  EXCULPATORY  PROVISIONS.  The  Agent  and its  officers,
directors,  employees, agents,  attorneys-in-fact or affiliates shall not be (i)
liable for any action lawfully taken or omitted to be taken by it or such Person
under or in  connection  herewith  or in  connection  with any of the other Loan
Documents  (except  for its or such  Person's  own gross  negligence  or willful



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misconduct),  or (ii)  responsible  in any manner to any of the  Lenders for any
recitals,  statements,  representations  or  warranties  made by any of the Loan
Parties  contained  herein  or in any  of the  other  Loan  Documents  or in any
certificate,  report,  documents,  financial statements or other written or oral
statement  referred to or provided  for in, or received by the Agent under or in
connection  herewith  or  in  connection  with  the  other  Loan  Documents,  or
enforceability  or sufficiency  therefor of any of the other Loan Documents,  or
for any  failure of any Loan  Party to  perform  its  obligations  hereunder  or
thereunder.   The  Agent  shall  not  be  responsible  to  any  Lender  for  the
effectiveness,   genuineness,   validity,   enforceability,   collectability  or
sufficiency of this Loan Agreement or any of the other Loan Documents or for any
representations,  warranties,  recitals or statements  made herein or therein or
made by the  Borrower or any Loan Party in any written or oral  statement  or in
any financial or other  statements,  instruments,  reports,  certificates or any
other  documents in  connection  herewith or therewith  furnished or made by the
Agent to the Lenders or by or on behalf of the Loan  Parties to the Agent or any
Lender  or be  required  to  ascertain  or  inquire  as to  the  performance  or
observance of any of the terms, conditions,  provisions, covenants or agreements
contained herein or therein or as to the use of the proceeds of the Loans or the
use of the Letters of Credit or of the  existence  or possible  existence of any
Default or Event of Default or to inspect  the  properties,  books or records of
the Loan Parties or any of their respective Affiliates.

         Section 10.9  RESIGNATION OF AGENT. The Agent may resign at any time by
giving  written  notice  to  the  Lenders  and  the  Borrower.   Upon  any  such
resignation,  the Required  Lenders  shall have the right to appoint a successor
Agent.  If no  successor  Agent  shall have been so  appointed  by the  Required
Lenders and shall have accepted such  appointment  within thirty (30) days after
the retiring  Agent's giving of notice of  resignation,  then the retiring Agent
will, on behalf of the Lenders,  appoint a successor Agent which shall be either
a Lender or a commercial  bank organized  under the laws of the United States of
America or any state  thereof  having  combined  capital and surplus of at least
$5,000,000,000.  Upon the acceptance of any  appointment as Agent hereunder by a
successor,  such successor shall thereupon succeed to and become vested with all
the rights, powers,  discretion,  privileges,  and duties of the retiring Agent,
and the  retiring  Agent  shall be  discharged  from its duties and  obligations
hereunder.  After any  retiring  Agent's  resignation  hereunder  as Agent,  the
provisions  of this  Article  10 shall  continue  in effect  for its  benefit in
respect of any actions taken or omitted to be taken by it while it was acting as
Agent.




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<PAGE>


                                   ARTICLE 11
                            MISCELLANEOUS PROVISIONS
                            ------------------------

         Section 11.1  EXPENSES;INDEMNIFICATION.  (a) The Borrower agrees to pay
on demand  (i) all  costs  and  expenses  of the  Agent in  connection  with the
syndication, preparation, execution, delivery, administration, modification, and
amendment of this Agreement,  the other Loan Documents,  and the other documents
to be delivered hereunder;  including,  without limitation,  the reasonable fees
and  expenses  of counsel  for the Agent  with  respect  thereto  (not to exceed
$30,000,  plus  out-of-pocket  expenses,  in connection with the preparation and
execution  of the Loan  Documents)  and with respect to advising the Agent as to
its rights and  responsibilities  under the Loan  Documents  and (ii) all out of
pocket  expenses  incurred by the Issuing Bank in connection  with the issuance,
amendment,  renewal  or  extension  by it of any  Letter of Credit or demand for
payment  thereunder.  The Borrower further agrees to pay on demand all costs and
expenses of the Agent,  the Issuing  Bank and the  Lenders,  if any  (including,
without  limitation,  reasonable  attorneys'  fees  and  expenses)  incurred  in
connection   with  the  enforcement   (whether   through   negotiations,   legal
proceedings,  or otherwise) of the Loan Documents and the other  documents to be
delivered  hereunder or in  connection  with the Loans made or Letters of Credit
issued hereunder.

                  (b) The  Borrower  agrees to indemnify  and hold  harmless the
Agent, the Issuing Bank and each Lender and each of their respective  Affiliates
and their respective officers, directors, employees, agents, and advisors (each,
an "Indemnified  Party") from and against any and all claims,  damages,  losses,
liabilities,  costs, and expenses  (including,  without  limitation,  reasonable
attorneys'  fees) that may be incurred  by or  asserted  or awarded  against any
Indemnified  Party,  in each case  arising  out of or in  connection  with or by
reason of (including,  without limitation, in connection with any investigation,
litigation, or proceeding or preparation of defense in connection therewith) the
Loan Documents,  any of the  transactions  contemplated  herein or the actual or
proposed use of the proceeds of the Loans or any Letter of Credit (including any
refusal  by an  Issuing  Bank to honor a demand  for  payment  under a Letter of
Credit issued by it if the documents presented in connection with such demand do
not  strictly  comply  with the terms of the  Letter of  Credit),  except to the
extent such  claim,  damage,  loss,  liability,  cost,  or expense is found in a
final,  non-appealable  judgment by a court of  competent  jurisdiction  to have
resulted from such Indemnified  Party's gross negligence or willful  misconduct.
In the case of an  investigation,  litigation  or other  proceeding to which the
indemnity in this Section  11.1(b)  applies,  such indemnity  shall be effective
whether or not such  investigation,  litigation  or proceeding is brought by the
Borrower,  its directors,  shareholders or creditors or an Indemnified  Party or
any other  Person,  whether or not any  Indemnified  Party is  otherwise a party
thereto and whether or not the transactions contemplated hereby are consummated.
The Borrower agrees not to assert any claim against the Agent, any Issuing Bank,
any  Lender,  any of their  respective  Affiliates,  or any of their  respective
directors,  officers, employees,  attorneys, agents, and advisers, on any theory
of liability, for special, indirect,  consequential, or punitive damages arising
out of or  otherwise  relating to the Loan  Documents,  any of the  transactions
contemplated  herein or the actual or proposed  use of the proceeds of the Loans
or Letters of Credit (including any refusal by an Issuing Bank to honor a demand
for payment under a Letter of Credit issued by it if the documents  presented in



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connection with such demands do not strictly comply with the terms of the Letter
of Credit) and waives any such claim it may now or hereafter have.

         Section 11.2  CHANGES IN GAAP.  The Agent and the Lenders  covenant and
agree that in the event there is a change in GAAP which  affects in any material
respect the  computation  of compliance  with any financial  covenant or Default
contained herein,  the Agent will confer with the Borrower and the Agent and the
Lenders will undertake in good faith to reach agreement as to amendments to such
covenants so that they will effectively  provide for tests of compliance similar
to the tests which were used prior to such amendment to GAAP.

         Section 11.3 ASSIGNMENTS AND PARTICIPATIONS. (a) Each Lender may assign
to one or more Eligible Assignees all or a portion of its rights and obligations
under this Agreement  (including,  without  limitation,  all or a portion of its
Loans, its Note or Notes, and its Commitment and its rights and obligations as a
Letter of Credit Participant); PROVIDED, HOWEVER, that

                  (i) each such assignment shall be to an Eligible Assignee;

                  (ii) except in the case of an assignment to another  Lender or
an assignment of all of a Lender's rights and obligations  under this Agreement,
any such partial  assignment shall be in an amount equal to Five Million Dollars
($5,000,000)  or an integral  multiple of One Million  Dollars  ($1,000,000)  in
excess thereof,

                  (iii) each such assignment by a Lender shall be of a constant,
and not  varying,  percentage  of all of its rights and  obligations  under this
Agreement and the Notes and Letters of Credit; and

                  (iv) the parties to such assignment  shall execute and deliver
to the Agent for its  acceptance  an  Assignment  and  Acceptance in the form of
EXHIBIT  H hereto,  together  with any Note  subject  to such  assignment  and a
processing fee of $3,500.00.

Upon execution,  delivery, and acceptance of such Assignment and Acceptance, the
assignee  thereunder  shall  be a  party  hereto  and,  to the  extent  of  such
assignment, have the obligations, rights, and benefits of a Lender hereunder and
the assigning  Lender shall,  to the extent of such  assignment,  relinquish its
rights and be  released  from its  obligations  under this  Agreement.  Upon the
consummation of any assignment pursuant to this Section, the assignor, the Agent
and the Borrower shall make appropriate  arrangements so that, if required,  new
Notes are  issued to the  assignor  and the  assignee.  If the  assignee  is not
incorporated  under the laws of the United States of America or a state thereof,
it shall  deliver to the  Borrower and the Agent  certification  as to exemption
from deduction or withholding of Taxes in accordance with Section 3.6(d).


                  (b) Upon its receipt of an Assignment and Acceptance  executed
by the parties  thereto,  together with any Note subject to such  assignment and
payment  of the  processing  fee,  the  Agent  shall,  if  such  Assignment  and
Acceptance  has been  completed  and is in  substantially  the form of EXHIBIT H
hereto,  (i) accept such Assignment and Acceptance,  (ii) record the information



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<PAGE>

contained  therein in the Register and (iii) give prompt  notice  thereof to the
parties thereto.

                  (c) The Agent shall  maintain  at its  address  referred to in
Section 11.7 a copy of each Assignment and Acceptance  delivered to and accepted
by it and a  register  for the  recordation  of the names and  addresses  of the
Lenders and the Commitment of, and principal  amount of the Loans owing to, each
Lender from time to time (the "Register").  The entries in the Register shall be
conclusive  and  binding  for  all  purposes,  absent  manifest  error,  and the
Borrower, the Agent and the Lenders may treat each Person whose name is recorded
in the Register as a Lender  hereunder for all purposes of this  Agreement.  The
Register  shall be available for inspection by the Borrower or any Lender at any
reasonable time and from time to time upon reasonable prior notice.

                  (d) Each Lender may sell participations to one or more Persons
in all or a portion of its rights,  obligations or rights and obligations  under
this  Agreement  (including  all or a portion of its  Commitment and its Loans);
PROVIDED, HOWEVER, that (i) such Lender's obligations under this Agreement shall
remain unchanged,  (ii) such Lender shall remain solely responsible to the other
parties hereto for the  performance of such  obligations,  (iii) the participant
shall be entitled to the benefit of the yield protection provisions contained in
Article 3 and the right of set-off contained in Article 9, and (iv) the Borrower
shall  continue to deal solely and directly with such Lender in connection  with
such Lender's rights and obligations under this Agreement, and such Lender shall
retain the sole right to enforce the obligations of the Borrower relating to its
Loans and its Note and to approve any amendment,  modification, or waiver of any
provision of this Agreement  (other than amendments,  modifications,  or waivers
decreasing  the amount of principal of or the rate at which  interest is payable
on such Loans or Note,  extending any scheduled  principal  payment date or date
fixed for the  payment of  interest  on such  Loans or Note,  or  extending  its
Commitment),  or  releasing  all  or  substantially  all of  the  Collateral  or
releasing all or substantially all of the Guaranties.

                  (e)  Notwithstanding  any  other  provision  set forth in this
Agreement,  any Lender may at any time  assign and pledge all or any  portion of
its Loans and its  Notes to any  Federal  Reserve  Bank as  collateral  security
pursuant to Regulation A of the Board of Governors of the Federal Reserve System
and  any  Operating  Circular  issued  by such  Federal  Reserve  Bank.  No such
assignment shall release the assigning Lender from its obligations hereunder.

                  (f) Any Lender may  furnish  any  information  concerning  the
Borrower or any of its  Subsidiaries  in the possession of such Lender from time
to time to assignees  and  participants  (including  prospective  assignees  and
participants), subject, however, to the provisions of Section 11.15 hereof.

         Section 11.4  SEVERAL OBLIGATIONS  OF LENDERS.  The  obligation of each
Lender to make the Loans provided for herein is several,  and no Lender shall be
liable in the event that the other  Lender  fails to make any Loan it has agreed
to make hereunder.



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<PAGE>

         Section  11.5  CUMULATIVE  RIGHTS AND NO WAIVER.  Each and every  right
granted to the  Lenders  or any of them  hereunder  or under any other  document
delivered hereunder or in connection herewith, or allowed them or any of them by
law or equity,  shall be cumulative  and may be exercised  from time to time. No
failure on the part of the Lenders or any of them to  exercise,  and no delay in
exercising, any right shall operate as a waiver thereof, nor shall any single or
partial  exercise by the Lenders or any of them of any right  preclude any other
or future exercise thereof or the exercise of any other right.

         Section 11.6 AMENDMENTS AND WAIVERS. Any provision of this Agreement or
any other Loan Document may be amended or waived if, but only if, such amendment
or waiver is in writing and is signed by the Borrower  and the Required  Lenders
(and,  if Article 10 or the rights or duties of the Agent are affected  thereby,
by the Agent); PROVIDED that no such amendment or waiver shall, unless signed by
each Lender  directly  affected  thereby,  (i) increase the  Commitments  of the
Lenders,  (ii)  reduce the  principal  of or rate of interest on any Loan or any
fees or other amounts payable  hereunder,  (iii) postpone any date fixed for the
payment of any scheduled  installment of principal of or interest on any Loan or
any  fees  or  other  amounts  payable  hereunder  or  for  termination  of  any
Commitment,  or (iv) change the  percentage of the  Commitments or of the unpaid
principal amount of the Notes, or the number of Lenders, which shall be required
for the  Lenders  or any of them to take any action  under  this  Section or any
other provision of this Agreement,  (v) release all or substantially  all of the
Guarantors  or a material  release of the  Collateral,  (vi) amend this  Section
11.6, or (vii) amend the definition of "Requied Lenders".

         Section 11.7  NOTICES.  Any notice shall be conclusively deemed to have
been  received by a party hereto and be effective on the day on which  delivered
to such party at the  address  or  addresses  set forth  below (or at such other
address as such party shall  specify to the other parties in writing) or if sent
by  registered  or certified  mail,  on the third  business day after the day on
which mailed, addressed to such party at said address:

         If to the Borrower to:        Arguss Holdings, Inc.
                                       One Church Street, Suite 302
                                       Rockville, Maryland 20850
                                       Attention:  Mr. Arthur F. Trudel

         With a copy to:               Robinson & Cole
                                       695 E. Main Street
                                       Stamford, Connecticut 06904
                                       Attn:  Richard A. Krantz, Esq.



         If to the Agent:              NationsBank, N. A.
                                       6610 Rockledge Drive, Third Floor
                                       Bethesda, Maryland 20817
                                       Attention:  Ms. Maria Manos Reed
                                                   Senior Vice President


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<PAGE>


         With a copy to:               Mays & Valentine, L.L.P.
                                       8201 Greensboro Drive, Suite 800
                                       McLean, Virginia 22102
                                       Attention:  Richard M. Pollak, Esquire

         If to NMS:                    NationsBanc Montgomery Securities
                                       100 North Tryon Street
                                       NC1-007-07-01
                                       Charlotte, North Carolina 28255
                                       Attention:  Kathleen R. Hebert

If to any Lender,  at the address shown opposite its name on the signature pages
as its Address for Notices.

         Section 11.8  APPLICABLE  LAW. This  Agreement  and the Loan  Documents
shall be construed in  accordance  with and governed by the laws of the State of
Maryland.

         Section  11.9  ENTIRE  AGREEMENT.  This  Agreement  and the other  Loan
Documents  and any other  documents,  together  with the Exhibits and  schedules
attached hereto and thereto, executed in connection herewith represent the final
agreement  between the parties and may not be contradicted by evidence of prior,
contemporaneous,  or subsequent  oral  agreements  of the parties.  There are no
unwritten oral agreements between the parties.

         Section 11.10  SUBMISSION TO JURISDICTION; WAIVER.  The Borrower hereby
irrevocably and unconditionally:

                  (a) Submits for itself and its property in any legal action or
proceeding relating directly or indirectly,  to this Agreement or any other Loan
Documents,  or for  recognition  and  enforcement  of any  judgment  in  respect
thereof, to the non-exclusive general jurisdiction of the courts of the State of
Maryland,  the  courts of the  United  States of  America  for the  District  of
Maryland and appellate courts from any thereof; consents that any such action or
proceeding  may be brought in such courts,  and waives any objection that it may
now or hereafter  have to the venue of any such action or proceeding in any such
court or that such action or proceeding  was brought in an  inconvenient  forum,
and agrees not to plead or claim the same;

                  (b) Waives personal service of any and all process upon it and
agrees that all such service of process in any such action or proceeding  may be
effected  by mailing a copy  thereof by  registered  or  certified  mail (or any
substantially  similar form of mail),  postage  prepaid,  to the Borrower at its
address set forth in Section 11.7 and that service so made shall be deemed to be
completed  upon the earlier of actual  receipt or three (3) Business  Days after
the same  shall  have been  posted  to the  Borrower's  address  as set forth in
Section 11.7;

                  (c) Waives any bond or security which might be required by any
court prior to allowing  the Agent or any Lender to exercise  any  remedies  set
forth herein or in any of the other Loan Documents; and



                                       70
<PAGE>

                  (d)  Agrees  that  nothing  herein  shall  affect the right to
effect service of process in any other manner permitted by law or shall limit or
otherwise  affect  the right of any  Lender to bring  any  action or  proceeding
against the Borrower or its property in the courts of other jurisdictions.

         Section 11.11 WAIVER OF JURY TRIAL; PUNITIVE DAMAGES. EACH PARTY HERETO
HEREBY  INTENTIONALLY AND VOLUNTARILY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW ANY RIGHT WHICH IT MAY HAVE TO A TRIAL BY JURY IN CONNECTION WITH
ANY MATTER  DIRECTLY OR INDIRECTLY  RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENTS AND ANY CLAIMS FOR PUNITIVE  DAMAGES.  EACH PARTY HERETO  ACKNOWLEDGES
THAT NO OTHER PARTY OR ANY PERSON  ACTING ON BEHALF OF SUCH OTHER PARTY HAS MADE
ANY REPRESENTATIONS OF FACT TO INDUCE THIS WAIVER OF TRIAL BY JURY OR IN ANY WAY
MODIFY OR NULLIFY ITS EFFECT.  EACH PARTY FURTHER  ACKNOWLEDGES THAT IT HAS BEEN
REPRESENTED  (OR HAS HAD THE  OPPORTUNITY TO BE  REPRESENTED)  IN THE SIGNING OF
THIS  AGREEMENT AND IN THE MAKING OF THIS WAIVER BY  INDEPENDENT  LEGAL COUNSEL,
SELECTED OF ITS OWN FREE WILL.

         Section 11.12  SURVIVORSHIP. All covenants, agreements, representations
and warranties  made herein and in the  certificates  delivered  pursuant hereto
shall survive the making by the Lenders of the Loans herein contemplated and the
execution  and  delivery to the Lenders of the Notes  evidencing  such Loans and
shall  continue  in full  force  and  effect  so long as (i) any of the Notes or
Letter of Credit is  outstanding  and unpaid or undrawn or (ii) the  Commitments
have not  expired or been  terminated.  Whenever  in this  Agreement  any of the
parties  hereto is referred  to, such  reference  shall be deemed to include the
successors and assigns of such party; and all covenants, promises and agreements
by or on behalf of the Borrower which are contained in this Agreement shall bind
and inure to the benefit of the successors and assigns of the Lenders.

         Section 11.13 EXECUTION IN COUNTERPARTS. This Agreement may be executed
in any  number of  counterparts  and by  different  parties  hereto in  separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which taken  together  shall  constitute  but one and the
same instrument.


         Section 11.14 HEADINGS.  Section and section headings in this Agreement
are included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose.

         Section  11.15  CONFIDENTIALITY.  The Agent and each  Lender  (each,  a
"LENDING PARTY") agree to keep  confidential  any information  furnished or made
available  to it by the  Borrower  pursuant  to this  Agreement;  PROVIDED  that
nothing herein shall prevent any Lending Party from disclosing such  information
(a) to any other  Lending Party or any  Affiliate of any Lending  Party,  or any



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<PAGE>

officer, director, employee, agent, or advisor of any Lending Party or Affiliate
of any Lending Party on a need to know basis,  (b) to any other Person on a need
to know  basis if  reasonably  incidental  to the  administration  of the credit
facility provided herein,  (c) as required by any law, rule, or regulation,  (d)
upon the order of any court or  administrative  agency,  (e) upon the request or
demand of any regulatory  agency or authority,  (f) that is or becomes available
to the public,  or that is or becomes  available to any Lending Party other than
as a result of a disclosure by any Lending Party prohibited by this Agreement or
by the  Borrower,  (g) in connection  with any  litigation to which such Lending
Party  or  any  of its  Affiliates  may be a  party  provided  Agent  will  take
reasonable steps to obtain a protective order for all such  information,  (h) to
the extent  necessary in  connection  with the exercise of any remedy under this
Agreement  or  any  other  Loan   Document,   and  (i)  subject  to   provisions
substantially  similar  to those  contained  in this  Section,  to any actual or
proposed participant or assignee.

         Section  11.16  RIGHT OF  SET-OFF.  In  addition  to any  rights now or
hereafter  granted  under  applicable  law  or  otherwise,  and  not  by  way of
limitation of any such rights, upon the occurrence of an Event of Default,  each
Lender is  authorized  at any time and from time to time,  without  presentment,
demand,  protest or other  notice of any kind (all of which  rights being hereby
expressly waived),  to set-off and to appropriate and apply any and all deposits
(general or  special)  and any other  indebtedness  at any time held or owing by
such Lender (including,  without limitation branches,  agencies or Affiliates of
such  Lender  wherever  located) to or for the credit or the account of any Loan
Party  against  obligations  and  liabilities  of such  Person  to  such  Lender
hereunder, under the Notes, the other Loan Documents or otherwise,  irrespective
of whether such Lender shall have made any demand  hereunder  and although  such
obligations,  liabilities  or  claims,  or any of  them,  may be  contingent  or
unmatured,  and any such set-off  shall be deemed to have been made  immediately
upon the  occurrence  of any Event of Default even though such charge is made or
entered on the books of such Lender subsequent thereto.  Any Person purchasing a
participation  in the Loans and Commitments  hereunder  pursuant to Section 11.3
may exercise all rights of set-off with respect to it participation  interest as
fully as if such person were a Lender hereunder.

         Section 11.17 SOURCE OF FUNDS.  Each of the Lenders  hereby  represents
and warrants to the Borrower that at least one of the following statements is an
accurate  representation  as to the source of funds to be used by such Lender in
connection with the financing hereunder:

                  (a) no part of such funds constitutes  assets allocated to any
separate account maintained by the Lender in which any employee benefit plan (or
its related trust) has any interest;

                  (b) to the  extent  that  any part of such  funds  constitutes
assets allocated to any separate account maintained by such Lender,  such Lender
has  disclosed  to the  Borrower  the name of each  employee  benefit plan whose
assets in such account  exceed 10% of the total assets of such account as of the
date of such  purchase  (and,  for  purposes of this  subsection  (b),  employee
benefit  plans  maintained  by the same  employer or employee  organization  are
deemed to be a single plan);



                                       72
<PAGE>

                  (c) to the  extent  that  any part of such  funds  constitutes
assets of an insurance  company's  general account,  such insurance  company has
complied with all of the  requirements of the  regulations  issued under Section
401(c)(1)(A) of ERISA; or

                  (d)  such  funds  constitute  assets  of one or more  specific
benefits plans which such Lender has identified in writing to the Borrower.

As used in this Section 11.17,  the terms "employee  benefit plan" and "separate
account" shall have the respective  meanings assigned to such terms in Section 3
of ERISA.



                         [SIGNATURES BEGIN ON NEXT PAGE]






                                       73
<PAGE>




         IN WITNESS  WHEREOF,  the Borrower has caused this Agreement to be duly
executed as of the date first above written by its duly  authorized  officer and
the Agent,  NMS and each  Lender  have  caused it to be  executed  by their duly
authorized officers.

WITNESS/ATTEST:                             ARGUSS HOLDINGS, INC.


                                            By /s/ Arthur Trudel
-------------------------                      -------------------------
                                               Name:  Arthur Trudel
                                               Title: Chief Financial Officer




                                       74
<PAGE>




WITNESS:                                    NATIONSBANK, N.A.,
                                            as Agent


                                            By: /s/ Maria Manos Reed
-------------------------                      -------------------------
                                               Maria Manos Reed
                                               Senior Vice President




                                       75
<PAGE>




WITNESS:                                    NATIONSBANC MONTGOMERY
                                             SECURITIES LLC
                                              as syndication agent and arranger


                                            By: /s/ Terry Katon
-------------------------                      -------------------------
                                               Name:  Terry Katon
                                               Title: Vice President







                                       76
<PAGE>





Type of                                          Amount of          Commitment
  Loan                                           Commitment         Percentage
-------                                          ----------         ----------


Term                                             $9,000,000             30%

Revolving                                        $21,000,000            30%



--------------------------

Lending Office for Eurodollar Loans:
(Term Loan and Revolving Loans)             NATIONSBANK, N.A.
                                            6610 Rockledge Drive, Suite 300
                                            Bethesda, Maryland  20817


                                            By: /s/ Maria Manos Reed
                                                --------------------------------
                                                Name:  Maria Manos Reed
                                                Title: Senior Vice President


Lending Office for Base Rate Loans:
(Term Loan and Revolving Loans)             NATIONSBANK, N.A.
                                            6610 Rockledge Drive, Suite 300
                                            Bethesda, Maryland  20817

Address for Notices:                        NATIONSBANK, N.A.
                                            6610 Rockledge Drive, Suite 300
                                            Bethesda, Maryland  20817
                                            Attn:  Ms. Maria Manos Reed
                                            Senior Vice President
                                            (301) 493-7072






                                       77
<PAGE>




Type of                                          Amount of          Commitment
  Loan                                           Commitment         Percentage
-------                                          ----------         ----------


Term                                             $3,300,000             11%

Revolving                                        $7,700,000             11%



--------------------------

Lending Office for Eurodollar Loans:
(Term Loan and Revolving Loans)             CRESTAR BANK
                                            1445 New York Avenue, N.W.
                                            Washington, D.C.  20005


                                            By: /s/ Diane E. Bauman
                                                --------------------------------
                                                Name:  Diane E. Bauman
                                                Title: Vice President

Lending Office for Base Rate Loans:
(Term Loan and Revolving Loans)             CRESTAR BANK
                                            1445 New York Avenue, N.W.
                                            Washington, D.C.  20005

Address for Notices:                        CRESTAR BANK
                                            1445 New York Avenue, N.W.
                                            Washington, D.C.  20005
                                            Attn:  Hathi Simmelink
                                            (202) 879-6331






                                       78
<PAGE>




Type of                                          Amount of          Commitment
  Loan                                           Commitment         Percentage
-------                                          ----------         ----------


Term                                             $3,300,000             11%

Revolving                                        $7,700,000             11%



--------------------------

Lending Office for Eurodollar Loans:
(Term Loan and Revolving Loans)             FLEET BANK, N.A.
                                            1185 Avenue of the Americas
                                            New York, New York  10036


                                            By: /s/ Thomas J. Levy
                                                --------------------------------
                                                Name:  Thomas J. Levy
                                                Title: Vice President

Lending Office for Base Rate Loans:
(Term Loan and Revolving Loans)             FLEET BANK, N.A.
                                            1185 Avenue of the Americas
                                            New York, New York  10036

Address for Notices:                        FLEET BANK, N.A.
                                            1185 Avenue of the Americas
                                            New York, New York  10036
                                            Attn:  Ms. Delores Jones
                                            (212) 819-5751




                                       79
<PAGE>




Type of                                          Amount of          Commitment
  Loan                                           Commitment         Percentage
-------                                          ----------         ----------


Term                                             $6,000,000             20%

Revolving                                        $14,000,000            20%



--------------------------

Lending Office for Eurodollar Loans:
(Term Loan and Revolving Loans)             KEYBANK, NATIONAL ASSOCIATION
                                            1 Canal Plaza
                                            Portland, Maine 04101

                                            By: /s/ Noel B. Graydon
                                                --------------------------------
                                                Name:  Noel B. Graydon
                                                Title: Vice President

Lending Office for Base Rate Loans:
(Term Loan and Revolving Loans)             KEYBANK, NATIONAL ASSOCIATION
                                            1 Canal Plaza
                                            Portland, Maine 04101

Address for Notices:                        KEYBANK, NATIONAL ASSOCIATION
                                            1 Canal Plaza
                                            Portland, Maine 04101
                                            Attn:  Ms. Missy Cookson
                                            (207) 874-7021






                                       80
<PAGE>




Type of                                          Amount of          Commitment
  Loan                                           Commitment         Percentage
-------                                          ----------         ----------


Term                                             $5,100,000             17%

Revolving                                        $11,900,000            17%



--------------------------

Lending Office for Eurodollar Loans:
(Term Loan and Revolving Loans)            UNION BANK OF CALIFORNIA, N.A.
                                           445 South Figueroa Street, 18th Floor
                                           Los Angeles, California  90071


                                           By: /s/ J. Scott Jessup
                                               ---------------------------------
                                               Name:  J. Scott Jessup
                                               Title: Vice President

Lending Office for Base Rate Loans:
(Term Loan and Revolving Loans)            UNION BANK OF CALIFORNIA, N.A.
                                           445 South Figueroa Street, 18th Floor
                                           Los Angeles, California  90071

Address for Notices:                       UNION BANK OF CALIFORNIA, N.A.
                                           445 South Figueroa Street, 18th Floor
                                           Los Angeles, California  90071
                                           Attn:  Mr. Scott Jessup
                                           (213) 236-4023






                                       81
<PAGE>




Type of                                          Amount of          Commitment
  Loan                                           Commitment         Percentage
-------                                          ----------         ----------


Term                                             $3,300,000             11%

Revolving                                        $7,700,000             11%



--------------------------

Lending Office for Eurodollar Loans:
(Term Loan and Revolving Loans)             NATIONAL CITY BANK
                                            1900 East 9th Street, Loc 2077
                                            Cleveland, Ohio  44114


                                            By: /s/ Barry Robinson
                                                --------------------------------
                                                Name:  Barry Robinson
                                                Title: Vice President

Lending Office for Base Rate Loans:
(Term Loan and Revolving Loans)             NATIONAL CITY BANK
                                            1900 East 9th Street, Loc 2077
                                            Cleveland, Ohio  44114

Address for Notices:                        NATIONAL CITY BANK
                                            1900 East 9th Street, Loc 2077
                                            Cleveland, Ohio  44114
                                            Attn:  Mr. Barry Robinson
                                            (216) 575-9322




                                       82
<PAGE>


                                    EXHIBITS
                                    --------

A-1      REVOLVING CREDIT NOTE

A-2      TERM NOTE

A-3      SWING LINE NOTE

B        NOTICE OF BORROWING

C        NOTICE OF CONTINUATION/CONVERSION

D        CLOSING CERTIFICATE OF BORROWER

E        CLOSING CERTIFICATE OF GUARANTOR

F        FORM OF OPINION OF BORROWER'S AND GUARANTOR'S COUNSEL

G        [RESERVED]

H        ASSIGNMENT AND ACCEPTANCE

I        INTELLECTUAL PROPERTY ASSIGNMENT

J        [RESERVED]

K        [RESERVED]

L        REQUEST FOR EXTENSION

M        SOLVENCY CERTIFICATE



<PAGE>



                                   EXHIBIT A-1
                              REVOLVING CREDIT NOTE
                              ---------------------









              Please see document immediately following this page.






<PAGE>


                                   EXHIBIT A-2
                                    TERM NOTE
                                    ---------









              Please see document immediately following this page.




<PAGE>


                                   EXHIBIT A-3
                                 SWING LINE NOTE
                                 ---------------









              Please see document immediately following this page.



<PAGE>


                                    EXHIBIT B
                               NOTICE OF BORROWING
                               -------------------

TO:  NationsBank, N.A.                                  DATE: __________________
     ________________________________
     ________________________________
     Attention:  ____________________

Irrevocable  notice is hereby given  pursuant to the Credit  Agreement  ("Credit
Agreement")  dated as of  ___________,  1999 among Arguss  Holdings,  Inc.,  the
Lenders named therein,  NMS, and NationsBank,  N.A. as agent for the Lenders, of
the  Revolving  Loan  specified  herein.  Capitalized  terms used herein but not
defined  herein  shall have the  meanings  ascribed  to such terms in the Credit
Agreement.


1. The Business Day of the proposed borrowing is ________________, _____.

2. The aggregate amount of the proposed borrowing is $____________.

3.  $____________  of  the  proposed  borrowing  is  to  be a  Base  Rate  Loan.
    $_______________ of the proposed borrowing is to be a Eurodollar Loan.

4.  The initial Interest Period for a Eurodollar Loan shall be [one] [two]
    [three] [six] months.

5.  The Revolving Loans should be disbursed as follows:
    ____________________________________________________.

The undersigned  hereby certifies that the following  statements are true on the
date hereof, and will be true on the date of the proposed borrowing,  before and
after giving effect thereto and to the application of the proceeds therefrom:

         i) the applicable  representations  and  warranties of the  undersigned
contained  in  Article 4 of the  Credit  Agreement  are true and  correct in all
material respects as though made on and as of such date; and

         ii) no Default or Event of Default has  occurred and is  continuing  or
shall result from such proposed borrowing.


<PAGE>



         iii) no event has occurred since the date of the most recent  financial
statements  delivered pursuant to the Credit Agreement which could reasonably be
expected to have a Material Adverse Effect.


                                            ARGUSS HOLDINGS, INC.

                                            By: 
                                               ---------------------------
                                               Name:
                                               Title:


<PAGE>


                                    EXHIBIT C
                        NOTICE OF CONTINUATION/CONVERSION
                        ---------------------------------

TO:  NATIONSBANK, N.A., as Agent
     ________________________________
     ________________________________
     Attention:  ____________________


Irrevocable  notice is hereby  given  pursuant  to the  Credit  Agreement  dated
____________,  1999,  by and among  Arguss  Holdings,  Inc.,  the Lenders  named
therein,  NMS,  and  NationsBank,  N.A. as Agent (the  "Credit  Agreement"),  of
Borrower's  desire to effect the  Continuation/Conversion  of a  Revolving  Loan
thereunder.  Capitalized terms used herein but not defined herein shall have the
meanings ascribed to such terms in the Credit Agreement.

1.  The   Business   Day   of   the   proposed    Continuation/Conversion    is:
    _______________, _____.

2.  The Type and amount of the  Revolving  Loan to be  Continued/Converted  are:
$___________________________ Loan.

3.  The Type of Loan into which the  existing Loan is to be  Continued/Converted
is: _______________.

4.  The Interest Period (if applicable) is: ____________________.

         The undersigned hereby certifies that the following statements are true
on  the  date   hereof,   and  will  be  true  on  the  date  of  the   proposed
Continuation/Conversion,  before  and after  giving  effect  thereto  and to the
application of the proceeds therefrom:

         (a) The applicable  representations  and warranties of the  undersigned
contained  in  Article 4 of the  Credit  Agreement  are true and  correct in all
material respects as though made on and as of such date.

         (b) No Default or Event of Default has  occurred and is  continuing  or
shall result from such Loan as continued or converted.

         (c) No event has occurred  since the date of the most recent  financial
statements  delivered pursuant to the Credit Agreement which could reasonably be
expected to have a Materially Adverse Effect.

Dated:_________________                     ARGUSS HOLDINGS, INC.

                                            By:                                
                                               -------------------------
                                               Name:


<PAGE>


                                    EXHIBIT D
                               CLOSING CERTIFICATE
                               -------------------
                                   (Borrower)










                                 Not Applicable.

<PAGE>


                                    EXHIBIT E
                               CLOSING CERTIFICATE
                               -------------------
                                   (Guarantor)









                                 Not Applicable.

<PAGE>


                                    EXHIBIT F
                          FORM OF OPINION OF BORROWER'S
                             AND GUARANTOR'S COUNSEL
                             -----------------------










              Please see document immediately following this page.




<PAGE>


                                    EXHIBIT G









                                   [RESERVED]



<PAGE>


                                    EXHIBIT H
                            ASSIGNMENT AND ACCEPTANCE
                            -------------------------









                                 Not Applicable





<PAGE>


                                    EXHIBIT J









                                   [RESERVED]




<PAGE>


                                    EXHIBIT K









                                   [RESERVED]



<PAGE>


                                    EXHIBIT L
                              REQUEST FOR EXTENSION
                              ---------------------








                                 Not Applicable.



<PAGE>


                                    EXHIBIT M
                              SOLVENCY CERTIFICATE
                              --------------------









              Please see document immediately following this page.